According to the Muslim historian al-Maqrizi, Umm al-Fahm was established in 1265. Its name means "Mother of Charcoal" in Arabic,) the village was surrounded by natural forests which were used to produce charcoal. Several archaeological sites around the city date to the Iron Age, as well as Muslim, Roman and Hellenistic periods.
In the late 19th century, Umm al-Fahm was described as having around 500 inhabitants, of which some 80 people were Christians. The place was well-built of stone, and the villagers were described as being very rich in cattle, goats and horses. A Muqam for a Sheik Iskander was noted on a hill above.
In 1948, there were 4,500 inhabitants, mostly farmers, in the Umm al-Fahm area. After the 1948 Arab-Israeli War, the Lausanne Conference of 1949 awarded the entire Little Triangle to Israel, which wanted it for security purposes. On 20 May 1949, the city's leader signed an oath of alliegiance to the State of Israel. Following its absorption into Israel, the town's population grew rapidly. By 1960, Umm al-Fahm was given local council status by the Israeli government. In 1965-1985, it was governed by elected councils. In 1985, Umm al-Fahm was given official city status