The first inhabitants of the Chattanooga area were Native Americans. Sites dating back to the Upper Paleolithic period (ca. 10,000 BCE) show continuous human occupation through the Archaic, Woodland, Mississippian/Muskogean/Yuchi (900–1714 CE), and Cherokee (1776–1838) periods. The Chickamauga Mound near the mouth of the Chickamauga Creek is the oldest (ca. 750 CE) remaining visible art in Chattanooga.

The Citico town and mound site was the most significant Mississippian/Muscogee landmark in Chattanooga up to 1915. The first part of the name "Chattanooga" derives from the Muskogean word cvto /chắtȯ/ – 'rock'. The latter may be derived from a regional suffix -nuga meaning dwelling or dwelling place. It is also believed to be derived from the Creek Indian word Chat-to-to-noog-gee, meaning ‘rock rising to a point’, which is speculated to be a reference to Lookout Mountain.

The earliest Cherokee occupation of the area dates from 1776, when Dragging Canoe separated himself from the main tribe to establish resistance to European settlement during the Cherokee–American wars. In 1816 John Ross, who later became Principal Chief, established Ross's Landing. Located along what is now Broad Street, it became one of the centers of Cherokee Nation settlement, which also extended into Georgia and Alabama.

In 1838, the U.S. government forced the Cherokees, along with other Native Americans, to relocate to the area designated as Indian Territory, in what is now the state of Oklahoma. Their journey west became known as the "Trail of Tears" for their exile and fatalities along the way. The U.S. Army used Ross's Landing as the site of one of three large internment camps, or "emigration depots", where Native Americans were held before the journey on the Trail of Tears.

In 1839, the community of Ross's Landing incorporated as the city of Chattanooga. The city grew quickly, initially benefiting from a location well-suited for river commerce. With the arrival of the railroad in 1850, Chattanooga became a boom town. The city was known as the site "where cotton meets corn," referring to its location along the cultural boundary between the mountain communities of southern Appalachia and the cotton-growing states to the south.

During the American Civil War, Chattanooga was a center of battle. Chattanooga served as a hub connecting fifty percent of the Confederacy's arsenals, those being located in Atlanta, Augusta, Columbus, and Macon. Chattanooga railroads proved vital in the Confederacy's transportation of raw material to processing plants where they were responsible for producing small arms munitions. During the Chickamauga Campaign, Union artillery bombarded Chattanooga as a diversion and occupied it on September 9, 1863. Following the Battle of Chickamauga, the defeated Union Army retreated to safety in Chattanooga. On November 23, 1863, the Battles for Chattanooga began when Union forces led by Major General Ulysses S. Grant reinforced troops at Chattanooga and advanced to Orchard Knob against Confederate troops besieging the city. The next day, the Battle of Lookout Mountain was fought, driving the Confederates off the mountain. On November 25, Grant's army routed the Confederates in the Battle of Missionary Ridge. In regard to victories won by the Union, Chattanooga marks one of three defining moments that turned the Civil War in their favor. The Battle of Gettysburg brought the streak of victories obtained by the Confederacy to an end, while the Siege of Vicksburg split the Confederacy itself in half, while Chattanooga served as the doorway to the deep south. These battles were followed the next spring by the Atlanta Campaign, beginning just over the nearby state line in Georgia and moving southeastward. After the war ended, the city became a major railroad hub and industrial and manufacturing center.

The largest flood in Chattanooga's history occurred in 1867, before the Tennessee Valley Authority (TVA) system was created in 1933 by Congress. The flood crested at 58 feet (18 m) and completely inundated the city. Since the completion of the reservoir system, the highest Chattanooga flood stage has been nearly 37 feet (11 m), which occurred in 1973. Without regulation, the flood would have crested at 52.4 feet (16.0 m). Chattanooga was a major priority in the design of the TVA reservoir system and remains a major operating priority in the 21st century.

In December 1906, Chattanooga was in the national headlines in United States v. Shipp, as the United States Supreme Court, in the only criminal trial in its history, ruled that Hamilton County Sheriff Joseph H. Shipp had violated Ed Johnson's civil rights when Shipp allowed a mob to enter the Hamilton County jail and lynch Johnson on the Walnut Street Bridge.

Chattanooga grew with the entry of the United States in the First World War in 1917; the nearest training camp was in Fort Oglethorpe, Georgia. The Influenza pandemic of 1918 closed local movie theaters and pool halls. By the 1930s, Chattanooga was known as the "Dynamo of Dixie", inspiring the 1941 Glenn Miller big-band swing song "Chattanooga Choo Choo". Through Mayor P.R. Olgiati's efforts, Chattanooga became the first city in Tennessee to have a completed interstate highway system in the latter 1960s. In February 1958, Chattanooga became one of the smallest cities in the country with three VHF television stations: WROM-TV (now WTVC-TV) channel 9 (ABC), WRGP-TV (now WRCB-TV) channel 3 (NBC), and WDEF-TV channel 12 (CBS).

The same mountains that provide Chattanooga's scenic backdrop also trap industrial pollutants, which settle over the city. In 1969, the federal government declared that Chattanooga had the dirtiest air in the nation. Like other early industrial cities, Chattanooga entered the 1970s with serious socioeconomic challenges, including job layoffs because of de-industrialization, deteriorating city infrastructure, racial tensions, and social division. Chattanooga's population increased by nearly 50,000 in the 1970s. However, this was mostly because the city annexed nearby residential areas. By the mid-1980s, local leaders launched Vision 2000, an effort to revitalize and reinvent Chattanooga's culture and economy. Chattanooga's population declined by more than 10% in the 1980s, but regained it over the next two decades, the only major U.S. city to do so.

Since the beginning of the 21st century, the city of Chattanooga has grown, attracting people from out of state and even out of the country.

Chattanooga launched the first one-gigabit-per-second Internet service in the United States in September 2010, provided through the city-owned utility EPB.

In August 2012, Chattanooga developed its own typeface, called Chatype, which marks the first time a municipality has its own typeface in the United States and the first crowd-funded, custom-made typeface in the world.

On July 16, 2015, six people—four U.S. Marines, one sailor, and the gunman—were killed and two more were wounded in shootings at two U.S. military facilities in Chattanooga.

On November 21, 2016, a school bus carrying students from Woodmore Elementary School crashed in the Brainerd neighborhood, killing 6 and injuring 23. In March 2018, the driver, an employee of Durham School Services, was convicted of six counts of criminally negligent homicide, 11 counts of reckless aggravated assault, seven counts of assault, reckless endangerment, reckless driving and illegally using his phone while driving. The crash reignited the debate about whether seat belts should be required in school buses.

As of the census of 2010, there were 167,674 people, 70,749 households, and 40,384 families residing in the city. The population density was 1,222.5 people per square mile (472.5/km²). There were 79,607 housing units at an average density of 588.8 per square mile (226.0/km²). The racial makeup of the city was 58.0% White, 34.9% Black, 2.0% Asian, 0.4% American Indian, 0.1% Pacific Islander, 2.8% from other races, and 1.9% from two or more races. Persons of Hispanic or Latino origin (regardless of race) constituted 5.5% of the total population. Non-Hispanic Whites were 55.9% of the population in 2010, down from 67.3% in 1980. There were 70,749 households, out of which 26.7% had children under the age of 18 living with them, 36% were married couples living together, 17.3% had a female householder with no husband present, and 42% were non-families. 33.5% of all households were made up of individuals, and 26% had someone living alone who was 65 years of age or older. The average household size was 2.26 and the average family size was 2.94.

In the city, the population was spread out, with 21.3% under the age of 18, 11.5% from 18 to 24, 27% from 25 to 44, 25.5% from 45 to 64, and 14.7% who were 65 years of age or older. The median age was 38.1 years. 46.1% of the population was male and 53.9% of the population was female.

The median income for a household in the city was $35,817, and the median income for a family was $43,314. Males had a median income of $36,109 versus $31,077 for females. The per capita income for the city was $23,756. About 14% of families and 16.5% of the population were below the poverty line, including 27% of those under age 18 and 13.8% of those age 65 or over.

Chattanooga's Metropolitan Statistical Area, which includes Hamilton, Marion, and Sequatchie counties in Tennessee and Catoosa, Dade, and Walker counties in Georgia, grew from 476,531 people, as of the 2000 census, to 529,222 people, as of the 2010 census, an 11% increase during the 2000s.

The single largest religious group in Chattanooga is Christianity. According to 2010 statistics, the Southern Baptist Convention was the largest denomination with 225 congregations and 122,300 members; followed by the United Methodist Church with 31,500 members and 83 churches. The third-largest group of Christians identified as non-denominational congregations; and the fourth-largest organized denomination was the Church of God (Cleveland, Tennessee) with 82 churches and 17,900 members. The 5th largest Christian religious group, according to 2010 statistics, was the Roman Catholic Diocese of Knoxville which had 12 congregations and 14,300 members. As of 2016, the second-largest religion in Chattanooga is Islam, with 2,200 adherents.