The city of Karnal is said to have been founded by Raja Karna, a central character in the Mahabharata epic. An alternative view is that it is “the city of Daanvir Karan”. It has been a walled town as far as its history can be traced and it may have had a citadel at one time. It is Known That Karan Died in Karnal.

Karnal sprang into prominence in 1739 when Persian emperor Nadir Shah defeated and captured the Mughal ruler Muhammad Shah in the Battle of Karnal. Raja Gopal Singh of Jind seized Karnal in 1763, and the Marhattas established themselves at Karnal in 1785. Skirmishes however, followed between the Marhattas and the Sikhs. In 1795 the Marhattas finally wrested the city from Raja Bhag Singh of Jind and made it over to the British-Irish military commander George Thomas, who took part in the fight.

Meanwhile Raja Gurdit Singh of Ladwa obtained possession of Karnal. It was captured by the British in 1805 and made over to Muhamdi Khan (Mandal). The British established a cantonment in 1811 but abandoned it after 30 years due to an outbreak of malaria. The fort which had been built by Raja Gajpat Singh of Jind was taken over by the British and converted into a residence for Dost Mohammad Khan, Amir of Kabul. The fort was used as a jail, as quarters for native cavalry and as a poorhouse. In 1862, it was made over to the Education Department, when the district school was moved into it from the city.

There is an interesting story attached from Karnal in regards of partition of India and birth of Pakistan. History suggests that the person who drag back Quaid-i-Azam Mohammad Ali Jinnah in to politics was a lived in Karnal in Klandri Gate. Apart from that the producer and director of movie (Bend It like Beckham) Gurinder Chadha is also born and brought up in Karnal.