It was raised to city status on August 1, 1954 by the merger of the town of Iiyama with neighboring villages of Akitsu, Tokiwa, Yanagihara, Tozama, Kijima and Zuiho.

Iiyama has a mayor-council form of government with a directly elected mayor and a unicameral city legislature of 16 members.

The economy of Iiyama is primarily agricultural with emphasis on rice, asparagus, mushrooms and potatoes.

[5] The TV and electronics manufacturer Iiyama was founded in the city in 1972, although, after a series of mergers, the company is no longer headquartered there.

The old office continues to be used as a manufacturing centre for Iiyama's parent company, Mouse Computer.