Located in the northern part of Nueva Ecija, Pantabangan then was a small village at the foot of Mount Mabilog below Mount Dalimanok which are found between the Sierra Madre and Caraballo Mountain ranges. The place was discovered on November 30, 1645 by Fr. Juan Alonzo de Abarca, an Augustinian priest who with the 29th Spanish mission in the Philippines.

The village grew into a settlement and was officially included in the map of the Philippines in 1747. In 1900, Pantabangan formally became a town.

In early 16th to 17th centuries, the Id-dules (Aetas or Baluga) and Egongots (Ilongots) tribe inhabited the southern Sierra Madre and Caraballo Mountains. Based on Mr. Elito V. Circa, a folk visual artist and a writer who wrote most of the Pantabangan-Egongot arts and culture and interviewed some of the Egongot chieftains from Aurora province. He discovered that Pantabangan (Pantabanganan in early 18th century) came from the root Ilongot word "Sabangan or Sabanganan" that means "junction of water streams". It was learned that most of the places in Central Luzon were derived from Ilongot word like Caanaoan, Puncan, Cadanglaan (now Carranglan), Kabaritan (Now San Jose City) and others. Bungamong (Bongabon) and Cadanglaan was formerly sitio of Pantabangan and Kabaritan also part of Pantabangan.

When the Second World War broke out, Japanese Imperial forces occupied the town municipality of Pantabangan in 1942 under the Japanese Occupation. During the Liberation, combined military forces of the Filipino troops under the Philippine Commonwealth Army and Philippine Constabulary units and the American troops of the United States Army and the U.S. Army Air Forces came, invaded and recaptured the town of Pantabangan and defeated Japanese soldiers in the Battle of Pantabangan and ended World War II.

In May 1966, the Old Philippine Congress passed the Upper Pampanga River Project Act (Republic Act 5499) authorizing the construction of the Pantabangan Dam and its appurtenant structures. The groundbreaking ceremony led by then President Ferdinand E. Marcos took place on June 11, 1971. The project was finally completed in August 1974.

The construction of the dam had great economic and social impact on the lives of Pantabangenos. About 8100 hectares of productive farmlands were submerged and the residents of the town proper (East and West Poblacion) and seven of its outlying barangays (Malbang, Villarica, Liberty, Cadaclan, San Juan, Napon-Napon, Marikit and Conversion were relocated in nearby places which later formed to what is now known as the new Pantabangan town. They had to start their lives all over again in a place where the future is uncertain. They were left with no choice. Indeed, the Pantabangenos sacrificed so much in the interest of national economic growth.

The Pantabangan Dam, the cleanest in the country and acclaimed as the second largest dam in Asia generates 112 megawatts of hydroelectric power and supplies the irrigation requirements of about 77,000 hectares of agricultural lands in Central Luzon.

In February 1996, the then President Fidel V. Ramos led the groundbreaking ceremony of the Casecnan Transbasin Project, a 27-kilometer underground tunnel from the Casecnan River in Nueva Vizcaya to a terminal point at the Pantabangan reservoir and was commissioned on December 11, 2001. The Project aims to augment the capacity of the Dam to irrigate an additional 50,000 hectares of agricultural land and generate an additional 140 megawatts of hydroelectric power for the Luzon grid.

The present Pantabangan town has 14 barangays and a total land area of about 41,735. 314 hectares. The succeeding years since its relocation saw its progress from a fifth class municipality in 1975, then to a fourth class, then to a second class municipality in 2006 and finally in July 2008, pursuant to Section 2 of the Department of Finance (DOF) Order No.23-08, Pantabangan was reclassified as a first class municipality. It is the only town in the Philippines which boasts of three hydroelectric plants within its territorial jurisdiction.