Ljungby was originally a köping (instituted in 1829), which did not become a municipality of its own when the first local government acts took effect in 1863, but retained part of the surrounding rural municipality with the same name. In 1936 Ljungby got the title of a city. It is since 1971 the seat of the much larger Ljungby Municipality.
Much of the town centre was destroyed in a fire in 1953. The (at the time) modern style of the rebuilding characterized by e.g. Hotel Terazza remains controversial locally.In 1986, Metallica bassist Cliff Burton died in a tragic bus accident close to Ljungby. There is a memorial stone by the Gyllene Rasten parking.

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