The territory covered by the present district became a part of Palamu district, when it formed on 1 January 1928. Latehar district was created on 4 April 2001 by separating the erstwhile Latehar subdivision of Palamu district. It is currently a part of the Red Corridor.
In 2006 the Indian government named Ranchi one of the country's 250 most backward districts (out of a total of 640). It is one of the 21 districts in Jharkhand currently receiving funds from the Backward Regions Grant Fund Programme (BRGF).