[1] In recognition of the Burmese military's negotiations with Karen National Union,[2] the oldest ethnic armed organization in the country,[3] Lay Kay Kaw was built as a "town of peace"[4] in 2015.

[5][6] With the support of Nippon Foundation,[7] Lay Kay Kaw was built in 2015 as a cooperation between the then-chief minister of Kayin State, Zaw Min, and KNU's chairperson, Saw Mutu Say Poe.

[6] Despite administration of the Kayin State Government, the town has been controlled de facto[9] by the KNU for six years.

[10] Since February 2021, anti-coup protesters and those who joined the civil disobedience movement came to Lay Kay Kaw to evade the military.

[19] On April 21, 2024, 24 Filipinos trafficked by a Chinese scam centre in the town's Dong Feng Park were rescued by police attachés of the Philippine Embassy of Thailand with the cooperation of Thai authorities.