The first mention of Dion in history comes from Thucydides, who reports that it was the first city reached by the Spartan general Brasidas after crossing from Thessaly into Macedon on his way through the realm of his ally Perdiccas II during his expedition against the Athenian colonies of Thrace in 424 BC.
Dion was made an important city, with religious celebrations and athletic contests, in the days of King Archelaus I (414-399 BC). Under the Romans it flourished once more, only to go through a Greek revival in the 2nd and 3rd Centuries AD.
In the 5th Century, a series of natural catastrophes (earthquakes and floods) caused the population of Dion to abandon their city and move closer to Mt. Olympus.
Prior to 1992, a village named Malathria was located near ancient Dion. In October of that year it was accorded municipality status and renamed "Dion Municipality". Its capital is the village of Kontariotissa.