The origin of Muroran's name is derived from the Ainu word "Mo Ruerani" that means "the bottom of a little slope". The little slope, in front of the former Senkai Temple in Sakimori-cho, is noted in connection with the name of Muroran.

In the late 16th century, the Muroran region came under the administration of the Matsumae clan. Muroran was developed as a trading post between the Ainu and the Matsumae clan people.

In 1892, the Port of Muroran was opened for the wooden bridge construction at Kaigan (former Tokikaramoi); at the same time, the main road began construction from Hakodate to Sapporo as the first step of Hokkaido Colonization Plan.

An Imperial decree in July 1899 established Muroran as an open port for trading with the United States and the United Kingdom.

With the opening of a ship route from Muroran to Mori and railroad extension to Iwamizawa, Muroran's municipality was started on August 1, 1922 as the core of the major land and sea traffic in the pioneer era of Hokkaido. Since then, Muroran has been developing as an important transportation hub and a center of the steel industry. This unfortunately earned the town's industrial plants a bombardment by some of the newest American battleships in July 1945, in the closing days of World War II.

Today, there are large cement factories, steel mills, oil refineries, and shipyards clustered around the port of Muroran