According to archaeological evidence, the first to settle in the area were the Thracian tribe Medi to which the famous rebel Spartacus belonged.

The Slavs who later came in these parts named the settlement Melnik after the sand formations surrounding it on all sides (the Bulgarian word мел mel means "white clay, chalk").

Melnik became the capital of an independent feudal principality ruled by Despot Alexius Slav, a descendant of the Asen dynasty, in 1209, and passed through an economic and cultural upsurge during his reign.

The town continued to flourish under Tsar Ivan Asen II because of the duty-free trade with Venetian-ruled Dubrovnik.

[1] In the late 18th century, the town had 1300 houses, seventy churches and a population of some 20,000 people, but a fire largely destroyed it.

[1] Since then it has been restored and rebuilt, and still, the current population of 400 is nowhere near the one from the beginning of the 20th century, when it primarily consisted of Greeks, but also of Bulgarians, Turks, Vlachs and Romani.

[7] The unique formations, which can resemble giant mushrooms, ancient towers, and obelisks, were formed when heavy rain eroded the sand and clay the hills are composed of.