According to some sources, the town of Shusha was founded in 1752 by Panah Ali Khan. From the mid-18th century to 1822, Shusha was the capital of the Karabakh Khanate.
The town became one of the cultural centers of the South Caucasus after the Russian conquest of the Caucasus region from Qajar Iran in the first half of the 19th century. Over time, it became a city and a home to many Azerbaijani intellectuals, poets, writers and especially, musicians (e.g., the ashiks, mugham singers, kobuz players). Shusha is often considered the cradle of Azerbaijan's music and poetry and one of the leading centres of the Azerbaijani culture.
Between May 1992 and November 2020, Shusha was under the de facto control of the separatist Republic of Artsakh and administered as the centre of its Shushi Province. On 8 November 2020, Azerbaijani forces retook the city during the 2020 Nagorno-Karabakh War following a three-day long battle.