Ancient occupation of this area dates back to the Bronze Age, marked by diverse megalithic monuments, including the archaeological site at Cabeço de Vouga, an important Roman military fortification along routes from Olissipo (Lisbon) to Bracara.
In the 9th Century, Águeda was a prosperous borough, with stable commerce and an active port that supported local and regional businesses. It was mentioned in documents from 1050 to 1077, by its primitive name Casal Lousado (Latin: Casal Lousato), or by its anglicized forms: Anegia, Agatha and Ágada; by the 9th Century, this settlement was referred to as Ágata. In a document dated 1050, there is mention of several villages situated within the current borders, many with names originating from Arab languages.
Águeda never achieved a foral during the Middle Ages, in contrast to its neighbors, it was considered regal lands and dominions of the monasteries of Lorvão and Vacariça. It functioned as an ancillary center on the road to Santiago de Compostela, and the river-side village was most certainly visited by Queen Isabel in 1325, during her customary pilgrimages to the religious center.
A new phase of settlement occurred after the establishment of the Kingdom of Portugal, from the 11th–12th century: although its inhabitants prospered, and had many privileges, their representatives from Aveiro in the Cortes of Évora (1451), never requested a foral declaration. King D. Manuel I included Águeda in a general foral granted to Aveiro, in 1515, but was only, later, provided a separate charter.
In 1834, Águeda ascended to the category of municipal seat, as a consequence of the Liberal Revolution, when major administrative reforms were initiated. Its important political place and strategic politico-military position, allowed Águeda to support military troops during the second French Invasion, when it functioned as military hospital. Resulting from the administrative reform, Águeda began its political career in the shadow of great change, and many of its citizens were important land reformers. The municipality of Águeda, was established on 31 December 1853, and integrated many older concelhos of medieval origins long since extinct, including Aguada de Cima, Castanheira do Vouga and Préstimo.
As a frontier city located between the sea and land, it occupies a privileged position, serviced by both railroads and an expanding road network. These advancements, allowed the economic and social development of the region, and placed Águeda in an important position, resulting in its growth and development. On 8 July 1985, Águeda was elevated to the category of city.
Águeda is an important commercial and industrial center, localized in an area that is extremely fertile; the primary sectors of note: corn harvests, fruit orchards, vineyards and forest products. The region known as the Bairrada, which encompasses many of the local civil parishes, is well known for its vineyards and wine industry, as well as its suckling pig.
It has developed a strong industrial base that includes factories that produce motorized and common bicycles and several companies concentrating on civil construction. In 2001, 60% of the resident population was employed in the secondary sector, yet between 1991–2001 there has been a 53% increase in those employed in tertiary sector, while there has been a 78.4% decrease in secondary sector throughout the municipality.