The local government reform of 1952 formed this municipality through the amalgamation of a lot of very small municipalities. It got its name from the only larger built-up locality in the area, Vårgårda. Its territory was not affected by the reform of 1971.
The Swedish religious revival in the 19th century was strong in Vårgårda Municipality, and the Christian climate is today dispersed in many denominations.
Industrially, Vårgårda Municipality has several nationwide recognized companies, such as Autoliv.