Dadeville was named for Major Francis Langhorne Dade, who died in the Seminole War in 1835. The town was granted a charter in 1837 and was first incorporated in 1858, lost its charter during the Civil War, and was incorporated a second time in 1878. Dadeville has been the Tallapoosa County seat since 1838.

Dadeville was home to the Graefenberg Medical Institute, Alabama's first medical school, which operated from 1852 until the outbreak of the Civil War; attempts to rehabilitate the school after the war failed, and the building burned in 1873.

Completion of the Thomas Wesley Martin Dam on the Tallapoosa River in 1926 and the subsequent creation of Lake Martin had and continues to have a strong economic impact on Dadeville.