Kengtung was founded by the grandson of King Mangrai. This migration of the Chiangmai dynasty, made in the 13th century with the idea of founding a new kingdom which called Lannathai in Chiang Mai, has resulted in Kengtung having a different type of Tai population from the rest of the Shan State.

The city hosted the headquarters of the Thai Phayap Army which had occupied the Shan States, during the Second World War. Kengtung Township (also spelled Kengtong) is a Township of Keng Tung District (Shan State)of Bumar(Myanmar). The principal town is Keng Tung(Kyaing Tong).

Kyaing Tong also carries the definition of "Walled City of Tung".

Kyaing Tong is built around a lake. And as the legend say, there was a powerful magician called "Tungkalasi" who used his magic staff to drain a lake of near-sea proportion. Then the city was built around it. The original city walls and gates can still be seen today.

Keng Tung is the most extensive of the Shan State in the province of Myanmar. It lies almost entirely east of the Salween River and its area is over 12,000 square miles. It is bounded on the north by the states of Mang Lon, Mong Lem and Keng Hung (Hsip Hsawng Pannh); east by the Mekong River, south by the Siamese Shan States, and west in a general way by the Salween River, though it overlaps it in some places. The state is known to the Chinese as Mhng Khng, and was frequently called by the Burmese the 32 cities of the Gn (HkOn). The classical name of the state is Khemarata or Khemarata Tungkapuri.

The present sawbwa or chief received his patent from the British government on the 9.2.1897. The early history of Keng Tung is very obscure, but Burmese influence seems to have been maintained since the latter half, at any rate, of the 16th century. The Chinese made several attempts to subdue the state, and appear to have taken the capital in 1765-66, but were driven out by the united Shan and Burmese troops. The same fate seems to have attended the first Siamese invasion of 1804. The second and third Siamese invasions, in 1852 and 1854, resulted in great disaster to the invaders, though the capital was invested for a time.