Although Nevşehir is close to the underground cities, fairy chimneys, monasteries, caravanserais and rock-hewn churches of Cappadocia, and has a few hotels, the modern town is not itself a tourist centre.

In 2015 a huge underground city was discovered underneath its centre following demolition works intended to clear the central hillside of ramshackle modern housing.

In 333 BC, Alexander the Great defeated the Persians and after his death, the surrounding area came under the rule of the dynasty of Ariarathes with Mazaka (present-day Kayseri) as its capital.

The so-called underground cities found around Nevşehir may originally have been built to escape persecution by the pagan Roman authorities although others believe they date back to Hittite times.

The castle on the hill in the middle of Nevşehir dates from the Byzantine period, when the region was on the frontline in the (holy) wars against the Islamic Caliphate.

The present-day city owes its foundation in the so-called Tulip Age to the grand vizier and son-in-law of the Sultan Ahmed III, Nevşehirli Damad İbrahim Pasha who was born in Muşkara and later took a great interest in its expansion.