Centuries back Payyanur was a part of the Ezhimala Rajya.  King Nandan who ruled this Ezhimala Rajya was very famous and mighty.  The books written during Sang Time describe about this country and this king with much importance.  Later Ezhimala became under the regime of the Chera Dynasty and thereafter the Mooshaka Dynasty.  Ramanthali was the headquarters of the Mooshaka Dynasty.

Payyanur is the northernmost of the traditional Brahman settlements of Kerala. When Brahmins took over the control of the society of Kerala, they formed 64 "manigramas "(villages) and Payyanur was one among them. Later for the administrative convenience they grouped these 64 villages into four “kazhakas”. Of course, Payyanur was again one among them (Perinchelloor, Parappoor and Chengannur being the other three). Sree Subrahmanya Swami Temple was the temple of the Payyanur kazhakam. It is observed that the customs of the Brahmins of Payyanur is entirely different from that of the Brahmins of other parts of Kerala. The main peculiarity is of the Brahmans of this village is that they follow matrilineal.
During the regime of the Kolathiri Dynasty Payyanur was a part of Kolathu Nadu ruled by the Kolathiri Rajas based in Chirakkal near Kannur. During the British Rule, Payyanur was considered as a "farka" which in term is a part of the Chirakkal Taluk. Till the formation of the Kerala State in 1957 Payyanur remained in the Malabar District of the Madras State. The famous scholar and author Dr. Herman Gundert , Willima Logan,the Malabar District collector during the British Rule who wrote Malabar Manual also visited Payyanur and did a lot of studies on the rich heritage of Payyanur.

During the past the city centre was Kachil Patanam (present Kavvayi) was the main town because of the waterways through Kavvayi River and its big Seaport. It was the administrative as well as business centre during that time. According to historians ships from China and other countries used to visit this port and anchored in the nearby river Changoorichal. Kavvayi retained its position even during the rule of British East India Company also. They established the first Magistrate court and Registrar’s Office in Kavvayi only.
Later Kokkanisseri became the city centre. The main road, which starts from Perumba, divided the town into two. The south of this road was called Payyanur village and the north Kokkanisseri village. The business centre was called Kokkanisseri Bazaar. Later the name Payyanur became common and thus the developed city of today came into existence.