Llívia was the site of an Iberian oppidum which commanded the region and was named Julia Lybica by the Romans. It was the ancient capital of Cerdanya in antiquity, before being replaced by Hix (commune of Bourg-Madame, France) in the Middle Ages. During the Visigothic period, its citadel, the castrum Libiae, was held by the rebel Paul of Narbonne against King Wamba in 672. As the "town (or 'city') of Cerdanya," 8th century Llívia may also have been the scene of the siege by which governor Abdul Rahman Al Ghafiqi of Muslim Spain rid himself of the Moorish (Berber) rebel Uthman ibn Naissa ("Munnuza"), who had allied himself with Duke Eudo of Aquitaine to improve the chances of his rebellion, ahead of the Battle of Tours (732 or 733), also known as the Battle of Poitiers.

In 1659, the Treaty of the Pyrenees ceded the comarques of Roussillon, Conflent, Capcir, Vallespir, and northern Cerdanya ("Cerdagne") to the French crown. Llívia did not become part of the French kingdom as the treaty stipulated that only villages were to be ceded to France, and Llívia was considered a villa (vila in Catalan) and not a village because of its status as the ancient capital of Cerdanya.

In 1939, at the end of the Spanish Civil War, there was some discussion of Llívia remaining a free territory of the defeated Republican government, but this was never carried out.