In the 16th century, the Portuguese first arrived here and then in the following century the Danes made an appearance. In 1673, the French arrived. Till then, Pondicherry was a weaving and fishing village. The French quarters started along with the sea and extended to the south. The city slowly emerged with the fort at its center. The town planners tried to implement this grid system methodically. It required the reconstruction of many houses, mostly those of the Tamilians. It also required the strict implementation of regulations. In all, it took the French almost a century to implement the plan-that of the present concentric pattern with the fort at the center and boulevards surrounding it. It has, however, expanded beyond the boulevard in recent years.

Today, some adjacent areas, which were previously villages, have been included within the city limits. Around the 1760's, the British destroyed the city including the fort. When the French reoccupied it, most of the buildings were reconstructed but not the fort.

In the latter part of the 18th and early 19th century, Pondicherry again fell into British hands and all construction activity came to a standstill. Most of the present day buildings came up in the 19th century, which also marked the advent of water supply in the city and the railway link with British India. By the 20th century, the city had expanded to include many neighboring villages, although few changes were made in the inner city.

This French colony became a part of the Indian Union in the early 1950's, with the French voluntarily relinquishing control.

Today, the Union Territory of Pondicherry includes the other three French enclaves of Karaikal (in Tamil Nadu), Mahe (in Kerala) and Yanam (in Andhra Pradesh)