Before the Zamorins, Ponnani is believed to have been under the rule of the Thirumanassery kings. The rule of the Zamorins can be described as the golden age of Ponnani. The rulers regarded this city as their second capital. When Vasco da Gama landed at Kappad in 1498, the Zamorin was in Ponnani. Ponnani was a nightmare for the Portuguese forces, and the Kunjali Marakkars of Kottakkal, who were the naval commanders of the Zamorin, were associated with Ponnani in many ways. Although they had roots in Kochi, they lived in Ponnani with their families for some time. It is believed that the Marakkar family left Ponnani and moved elsewhere following the burning of the city by the Portuguese commander Almeida in 1507. In 1766, the invasion of Hyder Ali brought the rule of the Zamorins to an end. Ponnani subsequently came under the rule of the Mysore Sultans. In 1790–92, Tipu Sultan sent an army from Mysore to Kochi, and they travelled through Ponnani. This route was initially known as Tipu Sultan Road and is now known as Puthuponnani Road. Following the fall of Tipu, Ponnani came under British domination. For a short period, it was part of the Bombay Presidency and later remained part of the Malabar District of the Madras Presidency for more than a century and a half. Until the formation of Ponnani Taluk in 1861 by combining various parts of Chavakkad, Kuttanad and Vettathunad taluks, Ponnani was the headquarters of Kuttanad Taluk. Until 1901, the Ponnani Munsif Court was known as the Kuttanad Munsif Court. Many people from this region participated in the freedom struggle. In 1921, a conference of Khilafat activists that marked the beginning of the Malabar Rebellion was held at Ponnani. The Ponnani Panchayat was formed in 1907. Ponnani Municipality was formed on 15 November 1977. Ponnani is one of the ancient ports on the western coast of South India. As one of the natural harbours of Kerala, Ponnani was highly accessible to the districts of Malappuram, Palakkad and Thrissur and was also the nearest port to the regions extending up to Coimbatore in the east. The port, with centuries of heritage, witnessed large-scale import and export activities.

Arabs, British and other Europeans were engaged in the trade of hill products at Ponnani Port. Even in the 1960s, ships arrived at this port, and until the mid-1970s, country boats known as Pathamaris used to arrive at the harbour and goods were loaded and unloaded. The uru-building industry, which flourished here from ancient times and continued until recent times, now remains only as a cherished memory. With the beginning of railway transportation in the Malabar region, maritime trade gradually declined, and over time Ponnani lost its importance as a port. Ponnani, which has geographical and historical significance as the estuary where the Bharathapuzha joins the Arabian Sea and as a base of the Kunjali Marakkars, also possesses a distinguished scholarly tradition of both Hinduism and Islam. This region, which preserves the distinctive cultural heritage of the Nila River basin, was also the field of activity of great personalities such as Kelappaji and Edasseri. There is a taluk, municipality and block panchayat named after Ponnani at the southern end of Malappuram district. However, Ponnani town and port do not fall within the boundaries of Ponnani Block Panchayat. Agriculture is the main productive sector in the Ponnani Block Panchayat area, with paddy being the major agricultural crop. Until the late 1950s, the land here was largely controlled by upper-caste landlords and Devaswoms, while farmers cultivated the land by taking it on lease from the landlords. The landlord system was strongly established during this period. The land reform laws brought an end to the landlord system, after which farmers' interest in agriculture increased.