Letang Municipality area was the capital of Dhimals in ancient times. There is a legend that there was a palace of Dhimal Raja at the place where there is Rajarani Pond, which can be reached after crossing the Chisang River, which is located in the west of Letang Bazar. Therefore, it is said that the name Letang came from the Dhimal language of the old inhabitants of this area. The tribals here are Dhimals. Letang is believed to be named after the Dhimal language word Leta. In the ancient Dhimal language, Leta means flat land that has come down from the mountains. Looking from the Rajarani Hill, known as Dhimal Pokhari, one can see the flat terrain of current Letang connected to the Hills. That is why the Dhimals called it Leta. At that time, Leta was full of forests. While pronouncing the word Leta at that time, it must have been corrupted and became Letang. On that basis, that land was called Letang. It is understood that the same Leta became the current Letang.

When searching for the historical background of the Letang Municipality area, this area was included in the ancient prehistoric state. Later, when Matsya Desh was separated from it, Letang region fell into Matsya Desh. Sometimes this region came under the rule of Mithila, Pundra and Kirantas and was ruled by the local rulers. Similarly, after the establishment of Vijayapur state, Letang area remained under Vijayapur.

It is said that the Letang area was covered by dense forest at that time. There were small settlements of people of some ethnic groups on the banks of the river. Due to the dense forests, people had to live on the banks of rivers and at the foot of mountains. The remains of old settlements occasionally found in the Letang area indicate this. Many such ancient remains have been found around Letang. Some of them have been destroyed and some have not yet been exposed.

After Vijaya Narayan in Vijayapur of Morang, Palpali Senraja Lohangsen captured it and this region came under the control of Palpali Sens. When Palpali Sen state was divided, Lohangsen got Makwanpur east of Narayani, so this part also came under Makwanpur. Similarly, Hariharsen's grandson Vidhata Indrasen made Vijayapur a separate state from Makwanpur, and Letang and other places became an integral part of Vijayapur. Before Senekal, a Rajouta named Dhanpal was ruling in Kaseni (currently Belbari Municipality 5), which is in the south of Letang. The remains of his capital and palace are still there. It is protected by the local people, which is known as Dhanpalgadhi. Over time, Dhanpal Rajauta fell. Dhanpal's kingdom merged in Vijayapur. On the other hand, Vijayapur also seems to have come under the control of the Senas from the local Rajauta. With the unification of Nepal in 1831 B.S. by Prithvi Narayan Shah, this area was also merged into greater Nepal.

Ever since Nepal was divided into 14 zones and 75 districts in 2018 B.S., the area occupied by the current Letang Municipality remained as the northern part of Morang district. In the year 2071 B.S., after combination of Letang and Bhogteni V.D.C together, Letang Bhogteni Municipality was formed. According to the report of the Local Level Restructuring Commission 2073 during the restructuring of the state of the Federal Republic of Nepal adopted by the Constitution of Nepal 2072, all except ward 1 of Letangbhogateni Municipality, wards 1, 2, 5, 6, 7, 8 and 9 of Jante Village Development Committee and all the wards of Warangi Village Development Committee have been combined to form Letang Municipality  on 27/11/2073 B.S.