The history of Yamaga dates back to ancient times, long before the modern city boundaries were formed. Archaeological finds, including numerous ancient burial mounds (kofun) in the vicinity, indicate that the Kikuchi River valley was inhabited and served as an important center of power as early as Japan's early historical periods. According to local lore, the famous hot springs were discovered here over a thousand years ago, serving as the initial draw for settlers and pilgrims.
Yamaga's transformation from scattered settlements into a thriving merchant town, particularly during the Edo period (1603–1868), was due to a fortunate combination of strategic location and natural resources:
- Post Station on the Buzen Tract: The city was situated on the important Buzen Kaido road, which connected Kumamoto Castle with the northern part of Kyushu. Yamaga served as a key resting point for daimyo feudal lords and merchants.
- River Logistics: The Kikuchi River played the role of a major transport artery. It was used to transport rice — the main currency of the time — to ports for further shipment to Osaka and Edo.
- Natural Wealth: The presence of geothermal springs ensured a steady flow of visitors looking to improve their health, which stimulated the development of the service industry and inns.
The economic heyday of the region was based on active rice trade, as well as the production of sake and silkworm cocoons. The capital accumulated by local merchants fostered a rich cultural environment, which gave birth to the unique craft of creating paper lanterns. This tradition traces back to the ancient legend of Emperor Keiko, for whom local residents lit the way with torches in a thick fog. Over time, this evolved into the art of making exquisite Yamaga-toro lanterns, crafted without the use of wood or metal, using only paper and glue, which has become the hallmark of the city's cultural heritage.