Originally designated a 28,700 ha (285 sq km) game sanctuary in 1955, Nagarahole was enlarged to its present size (643.39 sq km) in 1974 by combining the adjoining Mysore forests with the Nagarahole Sanctuary. The Nagarahole Sanctuary was centered on the Nagarahole settlement.

In fact two small towns of Nagarahole and Murkal now lie in the reserve, while Mastigudi is to the south. It gained the status of a National park in 1983. Local people are allowed to cultivate swamps, collect minor forest products and graze livestock in areas outside the core zone. One third of the present park is demarcated as a wilderness zone and all forms of disturbances including tourism and forestry are prohibited.

G.P. Sanderson, a British officer, pioneered and perfected the spectacular and barbaric Khedda system of capturing elephants here. Between 1890 and 1971 several Kheddas (stockades) were held in the Kakanaanakote forests (in the southern part of the park) during which 1,536 elephants were captured, 225 killed and countless others injured. The wild elephants captured were trained to be domestic in the camp at Hebella. Some of these old Kheddahs can be seen at Mastigudi. Also, when River Kabini recedes the remains of a Khedda can be noticed.