The first written record related to Kistarcsa dates to 1352 for the name Tarcsa, but it is believed that the settlement existed long before that. Until 1452 it was owned by the Tarchai family. The village was deserted during the fifteen-year war (1593-1606). After the exodus of the Turks and their defeat in the Rákóczi War of Independence, the Habsburgs divided the Ottoman lands among their faithful. The new owners preferred German or Slavic settlers rather than the returning Hungarian serfs. This is how the new population came to Kistarcsa in 1727 - from the counties of Trenčín and Nitra. The number of newcomers was higher than the Hungarian population, so Kistarcsa became ethnically Slavonic. During the spring campaign of the War of Independence of 1848-49, the army led by Lajos Aulich was deployed in Kistarcsa, a remote settlement on the Pest-Hatvan route.
A significant change in the life of the settlement took place at the close of the 19th century, following the introduction of rail transport. The HÉV, built in 1882, gave much impetus to the settlement. A rapid increase in the population was due to the high labour demand of the Machine and Rail Equipment Factory, founded in 1908.
With the establishment of the company, the expansion of the town in other direction began, resulting in the main traffic trail dividing Kistarcsa into roughly two parts. During the economic crisis, the ironworks collapsed. Its shares were bought by the Ganz Wagon Factory and in 1928 it was liquidated by dismantling the machines and demolishing some of the buildings. One of the housing estates of the factory became the property of the Ministry of the Interior in the 1930s, where an internment camp was built in the early 1930s, its darkest period being in the 1950s.
Since 1950, the camp has been run by the State Defence Agency under more harsh conditions. In October 1956, during the Hungarian Revolution, the Gödöllő micro-region was an important base of the national guards.
Kistarcsa has been declared a town on 1 September 2005.