Batu Pahat, formerly known as Bandar Penggaram, takes its name from a chiselled rock well located at the mouth of Batu Pahat River, near a coastal village of Kampung Minyak Beku.
It was believed that the well was dug by fleeing Siamese troops to collect drinking water, after a failed attack on Malacca during the reign of Sultan Muzaffar Shah who ruled from 1446 to 1459.
Batu Pahat was upgraded to a municipality on the 1st of January 2001. As of 2008, it is the 10th largest city in Malaysia, and the 2nd most developed city in the state of Johor. Numerous local and international companies are attracted to set up plants and factories in the area.