Muggia was attested in historical sources as Mugla in AD 933. The origin of the name Muggia is uncertain. It may have arisen from Latin mutila 'cut short, mutilated' in reference to a short projection from the land or a cape (cf. the cape north of Zadar, attested in Latin as Muchla bona in AD 1250, now Croatian Oštri rat). Another possibility is derivation from Latin *mucla 'milestone', and another hypothesis is that it comes from vulgar Latin Lamuc a 'small swamp'. The Slovene name Milje was borrowed from Romance Mugla (developing via *Mygla > *Migla > Milje).

Muggia provides many evident traces of its Venetian traditions and origin, as showed by the dialect, the gastronomic traditions, the gothic-venetian style of some houses, the devious "calli", the loggias, the ogive arches, the ancient coats of arms on the façades but mostly the main square, a true Venetian "campiello".

Memories of its early ages include an important pre-historic "castelliere" on Mt. Castellier (S. Barbara) and Roman (Archaeological Park of Castrum Muglae) and medieval remains in Muggia Vecchia (Old Muggia), once one of the guarding castles that in the 10th century were built to defend the Istrian border against the invasion of the Hungars.

The Castle of Muggia, destroyed in 1353 by the Triestines, retains several remains of the previous period such as the ruins of the walls. A tower dating back to 1374 was due to the Patriarch of Aquileia Marquard of Muggia. Later in 1735, under the government of the Republic of Venice, it was restored, but it was totally abandoned during the following century. The Castle was restored by its current owners, the sculptor Villi Bossi and his wife Gabriella, and may be visited upon request.

The most important art attraction is the little basilica of Santa Maria Assunta (10th-13th century), housing frescoes from the 14th-15th centuries.