It is a largely industrial town located at nearly half the distance between Reggio and the other major nearby city, Parma.

In ancient times, it was called Monticulum, meaning "small mount" and referring to the hilly terrain formed by floods of the nearby river Enza.

Traces of remains from as early as the Bronze Age (18th-17th centuries BC) have been found in the communal territory.

In the Middle Ages and early Modern times Montecchio (mentioned for the first time in a 781 diploma) was a fortified places contended between the Papal States, the Visconti of Milan, the Barbiano, the Sforza, the Gonzaga, the Farnese and then by Spain, France until, starting from the late Renaissance, it became part of the House of Este-held Duchy of Modena.

On the 28 June 2008, Montecchio Emilia was conferred the title of 'city' by decree of the Presidente della Repubblica, Giorgo Napolitano.