The city was founded on April 1, 1942.
Arao was once a large coal mining town, but it has since lost a great deal of its population, due to the closing of the mine back some 11 years ago. Some schools that once housed 1,500 children have now been looking at declining enrollments down 1,000 students or more. Currently, Arao's political concentration is on tourism, to try and lure people back to this once heavily populated land. Recent hopes to pull in tourists are in its two big amusement parks, Mitsui Greenland and Ultraman Land.
One notable aspect of this city includes Shoudai pottery, an art form almost completely exclusive to Arao, involving slow kilning and under glazing. Also, the Arao pear is a huge product grown in this town. The pear is round and brown and literally is about the size of a bowling ball.