Before Castleblayney was Castleblayney, this place was Baile na Lorgan - Irish for "town of the long low ridge." The land belonged to the Mac Mathghamhna chieftains, anglicised as MacMahon, whose stronghold gave the area its older Gaelic name: Caisleán Mathghamhna. Then came the Tudor conquest. The Nine Years' War of 1594 to 1603 broke the old Gaelic order in Ulster, and in 1611 the Crown handed the forfeited MacMahon lands to Sir Edward Blayney, a Welshman from Montgomeryshire who had served Queen Elizabeth I. He was made the 1st Baron Blayney a decade later. The little town he founded, perched between Lough Muckno and the surrounding drumlin hills, took his name and kept it through four centuries of changing fortunes.

Andrew Thomas Blayney, the 11th Baron, inherited the peerage and estate as a fourteen-year-old in 1784 and grew up to be the kind of figure Monaghan parents still mention when telling stories. Educated in France and Germany, fluent and ambitious, he rose to Lieutenant-General in the British Army. His regiment, the 89th Foot, fought in the West Indies, South America, southern Africa, and across the Napoleonic Wars under a nickname earned the hard way: Blayney's Bloodhounds. By around 1800 he had commissioned the new Blayney Castle from Robert Woodgate, a student of the celebrated Sir John Soane. The restrained Georgian house rose in the townland of Onomy. He also remade the town itself, widening the main street and giving Castleblayney the planned, ordered look that still defines its centre.

In 1853, the last Baron Blayney sold the castle and what remained of the estate to Henry Thomas Hope, an English plutocrat whose family had grown rich in Amsterdam banking. The Georgian house was renamed Hope Castle and given a Victorian makeover. Henry's grandson, Lord Francis Hope, inherited it and lived spectacularly beyond his means. To settle bankruptcy in 1896 he eventually arranged the sale of the family's most famous possession, the great blue diamond his ancestor had purchased in 1839. The Hope Diamond went to a dealer in 1901 and travelled through Cartier and Evalyn Walsh McLean before reaching the Smithsonian in 1958. Lord Francis, meanwhile, married the American stage actress May Yohe, divorced her in 1902, and eventually became the 8th Duke of Newcastle-under-Lyne. He sold his Castleblayney interest in 1928.

Between 1900 and 1904 the castle had a royal occupant: Prince Arthur, Duke of Connaught and Strathearn, son of Queen Victoria and Commander-in-Chief of British forces in Ireland. He leased Hope Castle from the Pelham-Clinton-Hope family as his country retreat away from his official residence at Kilmainham in Dublin. During the Irish War of Independence the British Army used the building as a barracks. From 1943 to 1974 Franciscan nuns ran it as a guesthouse. Monaghan County Council bought the demesne in the 1980s and demolished the Italianate Victorian extension, stripping the Woodgate interiors as they went. Then, in October 2010, arsonists burned what remained. The shell stands today above the lake, a Georgian ghost beside its still-working town.

On 7 March 1976 a car bomb detonated outside the Three Star Inn on Main Street. One person was killed and seventeen were injured. The attack was the work of the Glenanne gang, a loyalist paramilitary group responsible for some of the worst cross-border violence of the Troubles. Castleblayney sits less than ten kilometres from the border with Northern Ireland, and that proximity made it a target in years when the line between Monaghan and Armagh felt very thin indeed. The town remembers. It also remembers happier names: Eoin O'Duffy, born just south of town; Big Tom McBride, the country music singer who became a national institution; and Eamonn Toal, who represented Ireland at Eurovision 2000.