Situated near the Nera river, the town has been inhabited since ancient times but owes its current appearance to the late medieval period.

The castle that dominates the town dates back to 1198, while the walls, with two 1400's towers, were built in 13th-14th century.

Also of great artistic interest is the small Renaissance-style church of Santa Maria delle Grazie, which has recently been carefully restored.

Since 2008, Sant'Anatolia has been home to the Museo della Canapa,[5] which is housed in the 16th-century town hall and is one of the branches of the Umbrian Apennine Ridge Eco-museum.

From 1926 to 1968 Sant'Anatolia di Narco was served (via the station of the same name) by the Spoleto-Norcia railway, a narrow-gauge line connecting Spoleto with Norcia, which ran from 1 November 1926 to 31 July 1968, when it was closed down.