According to ancient mythology, the city was founded by the local Carian hero Alabandos. In the early days of the Seleucid period, Alabanda was part of the Chrysaor League, a loose association of Carian cities, including Alinda, Mylasa and Stratonikeia, which was mainly responsible for coordinating trade and defence.

Alabanda was renamed Antioch in honour of Antiochus III, who secured peace for the city. In 201 BC the city was conquered by Philip V of Macedonia. After the Seleucids were defeated by the Romans under Lucius Cornelius Scipio Asiaticus in the battle of Magnesia at Sipylos in 190 B.C., Alabanda got back its old name.

Soon after, the Romans conquered the city. The commander Quintus Labienus took the town in 40 B.C. at the head of a Parthian troop. The Parthians confiscated all treasures and possessions.
During the Roman Empire, according to Pliny, Alabanda was the seat of a conventus and Strabon mentions the high standard of living and decadence of the city's inhabitants.

Much of the once proud city has not been preserved. The ruins of the city include the theatre, a temple of Apollo Isotemos from the 2nd century BC. The city also has a bouleuterion (22 x 35 m) and an agora (112 x 72 m) that is only recognizable in its beginnings. Some towers of the city wall and numerous graves in a large necropolis have also been preserved. Excavations revealed a few inscriptions.

Until around the middle of the 3rd century A.D. the city minted its own coins. In Byzantine times the town was given a bishop's seat, the occupation of which can be traced from sources for the years 451 to 879.

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