On 23 October 1641, Patrick and Edmond O'Hanlon led an Irish rebel attack on the fortified town of Tandragee. The O'Hanlons were trying to reclaim their ancestral territory from Plantation settlers, and Tandragee was one of the first targets to fall. Protestant inhabitants were reportedly killed. The castle was burned. In April 1642, the rebel leader Felim O'Neill ordered his forces to gather at Tandragee, and about 2,000 soldiers responded, preparing to fight the Scots Covenanter army that had just landed in Ulster. The two sides finally met at Tandragee on 12 May 1643, when General Robert Monro led 4,000 Covenanters into the area and burned homes in the surrounding region. O'Neill's cavalry engaged Monro's lieutenant; the lieutenant and two captains and several soldiers were killed, but the O'Hanlons ultimately lost their hold on the town. The castle was left in ruins, where it stayed for nearly two centuries.

In about 1837, the 6th Duke of Manchester rebuilt the ruined fortified house as a romantic Scottish-baronial castle in the fashion of the day. Crenellated towers, mock arrow-slits, a Gothic gateway. The Montagu family used the building as their Irish seat for the rest of the 19th century. The Duke's grounds were the headquarters of the Tandragee Volunteers in 1779, and the 9th Duke of Manchester would inspect them in the demesne. On 12 July 1831, ten thousand Orangemen from across Ulster gathered in Tandragee to celebrate the Twelfth, marching around the castle gates which had been hung with between eighty and ninety Orange banners. The Montagus eventually moved on. The castle was leased to the United States Army in 1943 during the Second World War; the 6th Cavalry Regiment was billeted in and around the grounds, before transitioning to the 6th Mechanized Cavalry Group on 31 December 1943. American GIs walked the village streets through 1942 and 1943.

In 1956, the businessman Thomas Hutchinson bought the castle and grounds for his crisp company, Tayto (Northern Ireland), which had been founded in 1956 by Hutchinson's brother-in-law. The factory has been there ever since. Tayto crisps are a fixture of Irish childhood; the brand is not related to the southern Republic of Ireland brand of the same name, which is a different company with its own factory in Coolock, Dublin. The Tandragee factory makes cheese-and-onion, salt-and-vinegar, prawn cocktail, and the locally beloved Brown Sauce flavours. It runs guided tours through the castle, and on tour days you can buy fresh-from-the-fryer crisps still warm in their packets. In November 2019, the British Prime Minister Boris Johnson dropped by during a UK businesses tour. The castle itself, with its mock turrets and Gothic gateway, is now also a working potato-crisp plant. Few buildings in Ireland double as both.

Every year since 1958, the small roads around Tandragee have been closed for one of the great real-road motorcycle races in Northern Ireland. The Tandragee 100 is a 100-mile handicap event run on public country roads through the surrounding farmland. The names that have raced and won here amount to a roll-call of road-racing royalty: Guy Martin, Joey Dunlop, Ryan Farquhar, Michael Dunlop. In 2025, Michael Dunlop won and set a new course record of 111.58 miles per hour on his final circuit. Road racing in Northern Ireland is dangerous; the Tandragee 100 has seen serious injuries and fatalities over the decades. The local community defends the event with quiet pride, raising money for hospitals and air ambulances, and the road closures remain a yearly fixture of the early-May calendar.

Just beside the castle, on Church Street, stands Ballymore Parish Church. The building dates to 1343 in part, with reconstruction in 1812 after centuries of damage. Excavators found scorched stones in its walls during the 1812 rebuilding, evidence of the fire set by Edmond O'Hanlon during the 1641 rebellion. The church is one of the oldest in continuous use in County Armagh. Tandragee has six other active churches as well: Catholic, Presbyterian, Free Presbyterian (founded 1967 after a Reverend Ian Paisley revival mission), Methodist, Baptist, and several independent congregations. The town's population at the 2021 census was 3,545. Roughly 77% identified as from a Protestant background and roughly 11% from a Catholic background. The Twelfth marches through the square each year, and the Ring Ceremony, a brief religious service held only by Tandragee District No. 4 of the Orange Order, takes place at the central square on parade day. It is the only district in the Order to hold such a ceremony.

Lambeg drumming, the immense Lambeg drum strapped to a man's chest and beaten with cane sticks, is an Ulster Protestant tradition; one particular drumming rhythm is named for the town, Tandragee Time, and is heard at Twelfth parades throughout County Armagh. The county's other great food export, White's Oats, was founded in Tandragee by Thomas Henry White in 1841 along the Cusher River. White's is now Northern Ireland's largest oat miller and breakfast cereal producer. In 2023, plans were approved to move the operation to new premises in Craigavon. Walk the town now on a quiet evening and the dominant sounds are the Cusher River below the castle walls, the occasional motorcycle from the road racing club, and the steady rumble of the crisp factory. Tandragee is small. It has been making things for a long time.