Orhei takes its name from the medieval city of Old Orhei, about 10 miles (16 km) below the modern city on the Raut River, which was destroyed by the Crimean Tatars in the 14th to 16th centuries. It was the Ottoman-occupied military center of northern Bessarabia until it was ceded to the Russian Empire in 1812. The word "orhei" was used by local population, meaning "strengthened hill, fortress, deserted courtyard". The name "Orhei" is, according to one theory, derived from the Hungarian word Orhely or Varhely, the earlier meaning "lookout post", dating from the 13th century, when Hungarian forces built a series of defences in the area. Regardless of origin, Orhei gets its name from Orheiul Vechi, an active monastery near the village of Ivancea.

Like the rest of Bessarabia, Orhei was taken by the Kingdom of Romania after World War I and was annexed by the USSR in 1940. It was liberated from Axis forces on April 6, 1944, and was rebuilt after the war. In 1991 it became part of the Republic of Moldova.

Prior to 2003, Orhei was the capital of Orhei County, a large administrative region, but the country was divided further into Raion, or districts.

The St. Dumitru Church built by Vasile Lupu is located in this town.