Prevalje lies in a valley where the Meža River emerges from a narrow gorge, full of fluvioglacial sediments.

The area around Prevalje was settled in prehistoric times, attested by archeological finds which include a bronze axe of the Hallstatt culture.

In 1860, approximately 50 Roman marble slabs were found in the riverbed below today's cellulose and cardboard factory at Paloma in Zagrad.

[citation needed] In 2010, Slovenian officials discovered a mass grave containing the remains of approximately 700 men and women killed by units of KNOJ in 1945.

This is where the first industrial companies were established at the beginning of the 18th century, laying the foundations for rapid economic development of the area.Prevalje was an important ironworking centre.