The name "Kanlaon" means "[place] of Laon",[7]: 154  a pre-colonial Visayan goddess of creation, agriculture, and justice.

In 1941, Isidoro Bautista Sr., a geodetic engineer, along with its residents petitioned the Philippine government to convert Mabigo into a separate municipality.

During the Second World War, the Japanese Imperial Army captured Canlaon on April 10, 1942, right after the Battle of Bataan.

[10] Lorenzo Teves, then congressman of the first district of Negros Oriental, filed House Bill 4346 to convert Canlaon into a city.

It took effect on July 2, 1967, making Canlaon the second city in the province after Dumaguete.

Cebuano is primarily spoken in Canlaon but Hiligaynon is also used as the city borders Negros Occidental.