Native Americans were living in the Lenoir City area for thousands of years before the arrival of the first European settlers.

On Bussell Island, which lies across the Tennessee River to the south, archaeologists have discovered evidence of habitation dating to as early as the Archaic Period (8000–1000 B.C.).

[7] The Cherokee called the Lenoir City area Wa'ginsi and believed it to be the home of a large serpent that brought bad luck to anyone who saw it.

In the early 1830s, he built the Lenoir Cotton Mill—one of the earliest in the South—sited along the banks of Town Creek, a tributary of the Tennessee River.

[9] During the Civil War, the Lenoirs supported the Confederacy, due in part to associations with Confederate-leaning business interests in Knoxville.

[9] On June 20, 1863, a Union scouting expedition led by General William P. Sanders arrived at Lenoir Station after having failed to destroy the railroad trestle at Loudon.

[10] In the late 1880s, an abundance of financial capital, the popularity of social theories regarding planned cities, and a thriving coal mining industry in East Tennessee's Cumberland Plateau region led to the development of several company towns to support coal mining throughout the upper Tennessee Valley.

In 1889, Knoxville railroad magnate Charles McClung McGhee and his friend and associate Edward J. Sanford formed the Lenoir City Company.

[11] Lenoir City was laid out in a grid pattern with four quadrants, west of Town Creek and north of the railroad tracks.

Influenced by late 19th-century reform movements that stressed health and temperance, the developers set aside several lots for public parks, and a large garden area was planned between the railroad tracks and the river.

McGhee convinced a rail car company to open a factory in Lenoir City, and a short time later a knitting mill was established.

[12] Beginning in the 1930s during the Great Depression, a series of federal government projects provided a needed boost to Lenoir City's economy and invested in regional infrastructure.

The Tennessee Valley Authority's construction of Fort Loudoun Dam and reservoir, which began in 1940, provided hundreds of locals with jobs.

U.S. Highway 321 was built through Lenoir City in the 1980s primarily to provide greater access to the Great Smoky Mountains National Park, some 40 miles (64 km) southeast.

On February 21, 1993, an F-3 tornado touched down in eastern Roane County (just west of town) and tracked east-southeast directly toward the city.

The Lenoir City High School/Middle School property suffered major damage (it was redeveloped as River Oaks Place).

[13] In March 1998, a historic landmark, the William B. Lenoir Hotel, the block of Broadway (US 11) between A and B streets, was destroyed by a massive fire.

Wilburn's Barbershop, the Lenoir City Public Library, a Mexican grocery, offices for TV Readers magazine and Habitat for Humanity, a school photography company and photo finishing lab, and several apartments, were all destroyed by the blaze.

[14] This block was redeveloped for Roane State Community College, Tennessee Career Center, and a new Lenoir City Public Library.

The Tennessee River and TVA's Fort Loudoun and Watts Bar reservations provide the city's southern boundary.