Initially settled in 1827, it was incorporated in 1906 from part of the former Rahn Township; it is named for the coal industry—wherein, it was one of the principal early mining centers.

Coaldale is in the southern Anthracite Coal region in the Panther Creek Valley, a tributary of the Little Schuylkill River, along which U.S. Route 209 was eventually built between the steep climb up Pisgah Mountain from Nesquehoning (easterly) and its outlet in Tamaqua, approximately five miles to the west.

The history, business situation, and fortunes of not just the two, but of three towns, the third being the nearby Summit Hill, located a few thousand feet upslope, were tied in decades of co-development because the LC&N had built the western terminus of the nation's second railroad, the Summit Hill and Mauch Chunk Gravity Railway to ship coal out, and opened multiple mines throughout Coaldale and Lansford and the rest of the Panther Creek Valley in the days when railroads were coming into their own.

There is a historical marker for Mother Jones located in Coaldale, as she organized many strikes and protests on behalf of coal miners around the country for improved pay, safer work environment and child labor laws.

At one trial for Mary Jones, a prosecution lawyer famously said, "there sits the most dangerous woman in America... to put down their tools and walk out".

Upon arriving at a site that is present day Coaldale, John Moser built a log cabin on the north side of what was known as the Manila Grove Park.

The first dwelling houses (other than Moser's) were erected nearby in 1846 in what was known as Bugtown, located along the main road directly below the current St. Luke's Hospital.

[9] Coaldale was historically a coal-mining town, where the entire region was effectively the property of the Lehigh Coal & Navigation Company.

The mine, the railroads the LC&N put in and a small shirt factory were the main historic industries in Coaldale.

During the early years of mining in the Panther Valley, badly injured miners were taken to Ashland or Pottsville.

Some notable people come from here including: Coaldale is located at 40°49′20″N 75°54′36″W / 40.82222°N 75.91000°W / 40.82222; -75.91000 (40.822234, -75.910115),[13] which is (technically) one mile southwest of Lansford as both municipalities lie along the border of Carbon and Schuylkill Counties.

According to the United States Census Bureau, the borough has a total area of 2.2 square miles (5.7 km2), all land.

The borough's terrain is mostly hilly, many of those ancient mine tailings or culm piles, and when not developed, its lands are mostly forested.

Coaldale's combined town hall and fire department building was constructed in 1907 to the designs of the Wilkes-Barre architect, Owen McGlynn.