The town lies on the north bank of the Narmada River, It is built on the site of the ancient city of Mahesvari, and was the capital of king Arjuna Kartavirya, who was mentioned in the Sanskrit epics Mahabharata and Ramayana.
In the late eighteenth century Maheshwar served as the capital of RajmataAhilyaDeviHolkar, ruler of the state of Indore.
She embellished the city with many buildings and public works, and it is home to her palace, as well as numerous temples, a fort, and riverfront ghats, broad stone steps which step down to the river.
They are one of the prestigious dyansties whose name became associated with the very title of the ruler, which was generally known as Maharaja Holkar or Holkar Maharaja, while the official full title was Maharajadhiraj Raj Rajeshwar Sawai Shri (personal name) Holkar Bahadur, Maharaja of Indore, with the colonial style of His Highness.
He was succeeded by RajmataAhilyaDeviHolkar (reigned 1767-1795), his daughter-in-law.
In 1818, at the conclusion of the Third Anglo-Maratha War, the Holkars lost much of their territory to the British and were incorporated into the British Raj as a princely state of the Central India Agency.