The area where Montefredane stands today was inhabited in ancient times by the Samnites. Later, Roman populations settled near the present days village of Arcella.
The main buildings of Montefredane date back to the sixth century AD, when the inhabitants of Abellinum (now Atripalda) fled here after the destruction of their village.
In the Middle Ages, Montefredane was mentioned in the Montefredane Catalogus Baronum (1150–68) as part of the county of Avellino. In the following centuries, through ups and downs related to the names of several noble families, such as De Tufo, Capece, Brancaccio and Orsini, Montefredane gained increasing importance, until the plague of 1656 greatly reduced its development. Between 1650 and 1806 the land was owned by the noble family of Caracciolo, who brought it to its former splendor with the construction of the castle.
In 1980 the town was badly damaged by the earthquake in Irpinia.