It was created in 1860 from the districts of Rauland in Vinje and Øyfjell in Lårdal as a border adjustment. The new municipality had a population of 988. On 1 January 1964, Rauland was incorporated into Vinje. Prior to the merger Rauland had a population of 1,656.
- Sveinung Svalastoga (1772-1809), Norwegian rose painter, poet and woodcarver
- Olav Aslakson Versto (1892–1977), Norwegian politician for the Norwegian Labour Party
- Aslaug Vaa (1889–1965), Norwegian poet and playwright
- Rikard Berge (1881-1969), Norwegian folklorist, museologist, and magazine editor
The municipality (originally a parish) is named after the old farm, Rauland (Norse Rauðaland), since the first church was built there. The first element is the genitive case of rauði m 'bog-iron', the last element is land n 'land, farm'. (The many marshlands in the parish are filled with bog-iron, and for centuries its production was an important local resource.)
- Dag Jukvam / Statistics Norway (1999). Historisk oversikt over endringer i kommune- og fylkesinndelingen.
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