It is famous for its tourist attractions such as the wooden boat festival which is staged during the first week of August every year.

It also has a growing reputation as the regional capital of arts and crafts, which culminates in the "Villvin-festival" during the summer holiday season.

The Stangholmen Lighthouse lies a short distance off the shore, just southeast of the harbor, marking the channel leading into the town.

In Letters on Sweden, Norway, and Denmark, Mary Wollstonecraft wrote extensively while visiting Risør in 1783, including the following remarks:[4] Risør played a role in the Napoleonic Wars from 1807 to 1814, when Denmark–Norway took France's side, and therefore became the enemy of Norway's most important trading-partner: Great Britain.

It was south of Risør, at Lyngør (now in the neighboring Tvedestrand municipality) that several British warships, headed by HMS Dictator of the English Royal Navy pursued and sank the last major vessel and the pride of Norway: the frigate HDMS Najaden.

On 1 January 1838, the new formannskapsdistrikt law came into effect, granting each parish and town in Norway the rights to have a self-governing council.

The transition to steamships and the economic damage of World War I, however, destroyed Risør's shipping industry.

On 1 January 1901, an area of the neighboring municipality of Søndeled (population: 658) was transferred to the city, greatly expanding Risør.