Palmas was founded in 1990 and developed from the ground up in a former agricultural area as the capital of the new state of Tocantins, formed under the 1988 constitution.

A symmetrical park lies at the city centre, and a large central avenue similar to Brasília's Monumental Axis extends north to south.

In 2002, the Lajeado Hydroelectric Power Plant [pt] was completed on the Tocantins River, creating a large reservoir and giving the city new beaches.

[6] Most of Tocantins, including where Palmas is located, (except the extreme west and northern regions) is situated within a vast Brazilian area known as the cerrado.

It is situated in a 'bow' valley of Rio Tocantins and surrounded by mountains from three sides; with its low elevation, 195 metres above sea level, these factors increase the humidity and discomfort of hot days.

While the city layout was being developed, builders preserved many of the original trees, left intact in green areas along the widely spaced avenues.

The share of agriculture in the economy is less than the service sector, being based on small farms around the city and the highways that provide access to Palmas.

Today Palmas city has become a center whose trade and economic influence covers the entire state of Tocantins, in addition to the southeastern Pará, the northeastern Mato Grosso, and the southern Maranhão.

In 2007 the Gross Domestic Product had a strong expansion was estimated at $2.2 billion, driven by investments of the City of Palms in the economy.

Due to this growth, Palmas has attracted major investments, such as the Capim Dourado Shopping (inaugurated in August/2010), the multimodal yard of the north–south (located in the municipality of Porto Nacional, on the banks of the TO-080), plus branches of hypermarket networks: Atacadão, Makro and Assaí.

[16] Educational institutions include: Palmas is close to Taquaruçu, an ecotourism resort and village located in the hills.

The Federal Highway (BR-153) connects Palmas north and south through a 60 km drive west to Paraiso de Tocantins.

The arterial avenues of the city is the Avenida Teotônio Segurado, connecting the North Director Plan with Taquaralto, on the South Palmas, and Avenida Juscelino Kubitschek, connecting the west of Palmas and Ponte Fernando Henrique Cardoso with the state highway TO-050.

In sports, the most notable football club in the city is Palmas FR, which plays at the Nilton Santos Stadium.

In August 2014 Palmas was chosen as the first host city of the World Indigenous Games, a multisport competition held in September 2015.