Shanhua was inhabited by the Taiwanese aboriginal tribe of Siraya, who called it Bakaloan (transliterated into Chinese: 目加溜灣; Pe̍h-ōe-jī: Ba̍k-ka-liù-oan) (see also Anding, bordering to the southwest).

Under the Kingdom of Tungning, Bakaloan was governed as Sian-hoa Village (善化里; Siān-hoà-lí) of Tien-hsing County (天興縣).

After the handover of Taiwan from Japan to the Republic of China in 1945, Shanhua was organized as an urban township of Tainan County.

Until 25 December 2010, the chief executive of Shanhua Township was the popularly elected magistrate (Chinese: 鎮長).

The district consists of Tungguan, Zuojia, Guangwen, Wenchang, Nanguan, Wenzheng, Hujia, Hucuo, Shinai, Ximei, Liufen, Liude, Tianliao, Niuzhuang, Jiabei, Jianan, Xiaoxin, Dingjie, Changlong and Liantan Village.