Sagar owes its importance to having been made the capital of the Maratha governor Govind Pant Bundele who established himself here in 1735. By a treaty concluded with the Maratha Peshwa in 1818, at the conclusion of the Third Anglo-Maratha War, the greater part of the present district was made over to the British. The town became the capital of the Saugor and Nerbudda Territories, and then attached to the North-Western Provinces. The Saugor and Nerbudda Territories later became part of the Central Provinces (afterwards Central Provinces and Berar) and Sagar District was added to Jabalpur Division. During the Revolt of 1857 the whole district was in the possession of the rebels, except the town and fort, in which the British were shut up for eight months, until relieved by Sir Hugh Rose. The rebels were totally defeated and British rule restored by March, 1858. In the early 20th century Sagar had a British cantonment, which contained a battery of artillery, a detachment of a European regiment, a native cavalry and a native infantry regiment. Upon India’s independence in 1947, the former Central Provinces and Berar became the Indian state of Madhya Pradesh.
As of 2001 India census, Sagar had a population of 232,321. Males constitute 53% of the population and females 47%. Sagar has an average literacy rate of 74%, higher than the national average of 59.5%: male literacy is 80%, and female literacy is 68%.