Vaniyambadi was one of the Bara Mahal district towns. Bara Mahal were the twelve small fiefdoms ruled by twelve chieftains. The land was covered by jungle and dry land. The Atheetheswara temple at old Vaniyambadi signifies how old this town is. The famous Chola king Rajendra I, in 1390, had gifted some sheep to this temple to keep the lamp burning perpetually to Lord Virundinevar in this temple. This information is inscribed on the northern wall of the above temple. From the last quarter of the 13th century to the first half of the 14th century, Kongunadu was ruled by three distinct powers – the Pandias, the Hoyasalas, and the Cheras. Vaniyambadi was a part of Kongunadu.
In 1336 Vijayanagar kingdom defeated the ruler and established the rule in Kongunadu. Vaniyambadi thus came under the rule of a chieftain who owed allegiance to Vijayanagar kingdom. This ruler had also made gift of land to the temple at old Vaniyambadi.
After the decline of Vijayanagar kingdom, Vaniyambadi was brought under the rule of the king of Mysore. When Haider Ali became the ruler of Mysore, Vaniyambadi came under the rule of Pathan Nawabs of Cuddapah. And these Nawabs were loyal to Haider Ali. Marathas captured it from Haider Ali in 1760, and again surrendered it to Haider Ali in 1767. Col. Smith captured Vaniyambadi and brought it under the rule of British Govt. The Governor General Cornwallis once marched through the town. In 1801 the small town of Vaniyambadi was ceded to the British Govt. by a treaty, and it remained a part of British Govt. till independence.
Railway line was laid in 1857. By 1858, Vaniyambadi had developed into a small town. Municipality was constituted in Vaniyambadi on 1 April 1886. Till 1911, it was a sub-taluk of Salem district.
Amresh Misra, author of ‘War of Civilization: India, South Asia, Europe and the World 1857-1867’ wrote an article ‘Do gaz zameen for Zafar’ and it was published on page 7 in Deccan Chronicle of 10th May 2007. Talking about the uprisings of 1857, he says “It is commonly believed and propagated that the Madras Army and the Madras Presidency were bereft of risings. Yet in Madras, at a place called Vaniyambadi, full of Labbai Muslims, the 8th Madras Cavalry rose up in revolt”.