The minor district (King Amphoe) was created on May 5, 1981, when the three tambon Mae Pao, Mae Tam and Mai Ya were split off from Thoeng district. It was upgraded to a full district on August 12, 1987.
The district is subdivided into 5 subdistricts (tambon), which are further subdivided into 69 villages (muban). Phaya Mengrai is a township (thesaban tambon) which covers parts of tambon Mengrai and Mae Pao. There are further 5 Tambon administrative organizations (TAO).