The history of Dahisar is probably as old as the ruins of Mandpeshwar caves that lie on the Dahisar - Borivali border. The original residents of Dahisar are the Panchkalshis, Agris, East Indians and Kolis, who still live primarily in the hamlets of Kandarpada and Gaothan and the tribals who lived in the hills surrounding Dahisar - the Warlis and Dublis.

With the construction of the railway line connecting Dahisar to the city of Mumbai over a century ago, came the first lot of migrants, the people from Sindhudurg region of Konkan. These migrants established the first planned residential areas of Dahisar - Maratha Colony in Dahisar East and Mhatre Wadi in the West. The Railway authorities wanted to name the rail head at Dahisar as Mount Poinsur Road, but the locals opposed this move and forced the authorities to name it as Dahisar.

Medina Manzil, Patel Colony, Zainab Baugh, Sanjeevani, Gol Building and Mankarnika(1970) were amongst the first building style residential areas of Dahisar. The 70s saw the setting up of residential areas of Gokul and Shailendra Nagar.

The 80s and 90s saw a spurt in the development of residential complexes. Anand Nagar was the first of the very large residential complexes to be built in Dahisar.

Dahisar was originally a part of Thane District, it became a part of Mumbai in the 1960s.

Dahisar was once a popular spot for film shoots. There were numerous idyllic locations for film shoots like, the Dahisar river and the old bridge that now lies in the ruins,the small hillock with its orchards which is now the shanti nagar slum and the Bhoot Bangla which is now a film studio. One of the last movies to be shot in Dahisar was the Amitabh starrer, Suhaag, the climax of the Film was shot on the stairs that led up to Bhav Devi Temple at Dahivali. Most of Old Hindi Films Names, Bandhan, Chandan, Zula, Mahuwa, Mera Gaon Mera Desh, Kachche Dhaage, Shor, Dost, Zazbaat, Shakti, Hatya, Poketmaar, Aanmilo Sajnaa.