Matara historically belongs to the area that was called the Kingdom of Ruhuna, which was one of the three kingdoms in Sri Lanka (Thun Sinhalaya තුන් සිංහලය). According to Thotagamuwe Sri Rahula Thera's Paravi Sndesaya King Weerabamapanam made Matara as his capital and named it "Mapatuna". The temple in the middle of the town is also built by ancient kings, and now it is a very popular sacred place among the Buddhists in the area.

In the 16th and 18th centuries, Matara was ruled by the Portuguese and the Dutch respectively.

In 1756, the Dutch captured the Maritime Province and divided it into four administrative areas — Sabaragamuwa, Sath Korle, Sathara Korele and Matara. Out of these, Matara District covered the largest area (essentially the whole of the Southern Province up to the Kaluganga River). In the deed given by King Dharmapala to the Dutch, it mentioned that the area of Matara District extended from Kotte to Walawe Ganga River.

In 1760, the fort was successfully attacked by forces from the Kandyan kingdom. Matara maintained in the hands of the Sinhalese for almost one year. In 1762, the Dutch recaptured Matara Fort, without any significant resistance. Matara was the second most important fort, behind Galle fort, for the southern maritime provinces of the Dutch and a commanding base for some inland forts.

In 1796, the fort was ceremoniously handed over to the British. The Dutch and English culture and architecture can still be seen throughout the area. The lighthouse at Dondra Head was built by the Dutch, and it is considered one of the oldest lighthouses in Sri Lanka. The two fortresses, the Matara fort and the Star fort, that were built by the Dutch can be found in the city. Other important Colonial works are the St Mary's Church and the marketplace at Nupe Junction.

Weherahena temple
The most famous thinkers who lived in the area are Kumaratunga Munidasa and Gajaman Nona. The ethnic majority of Matara is Sinhalese; during the 16th and 17th centuries Moors arrived in the area as traders from Arabia. Today their descendants coexist with Sinhalese peacefully as an ethnic minority.