Founded by Greek refugees from Edirne after the Treaty of Lausanne when the population exchange occurred between Turkey and Greece, in which the river Evros became the new border between the two countries.

In ancient times, there was Orestias, a small settlement on this site which legends claim was founded by Orestes, the son of Agamemnon and Clytemnestra.

Following the Greco-Turkish War (1919–1922) and the Armistice of Mudanya (October 1922), the Western Forces surrendered Eastern Thrace to Turkey and the Greek army was ordered to withdraw within 15 days to positions east of Evros.

On 4 June 1923, a committee, which had only been formed the day before at a joint meeting of the inhabitants of old Orestiada, traveled 17 kilometers south, to the uninhabited rural site of Kum-Tsiflik (Sandy Estate), to view the possible new settlement.

As well, a cattle breeding fund gives commercial impetus to the city and the whole area which is in such an economically strategic location in Europe.

In November 2010, the European Union sent Frontex forces to Orestiada to help Greek police patrol the local section of the border with Turkey.

Orestiada is only 6 km west of the banks of the Evros, which forms a natural border between Greece and Turkey.