Although there is evidence of settlements in the area as early as the bronze age, the town is first mentioned under a name resembling its modern name in the 17th century under the toponym Htetovo. The legend is that Tetovo got its name after the legendary hero Teto, who cleared the town from snakes; not surprisingly, Tetovo means Teto's place.

In the middle ages Tetovo was an important trade center for the local farmers and craftsmen, as well as an important military fortification for the Ottomans. In the 19th century, the Russian Consul I. Yastrebov spoke highly of Tetovo's climate - mild snowy winters, sunny and comfortably warm summers. The traveler Ami Bue described Tetovo as a very clean city. Today, Tetovo has a well-developed textile and clothing industry.

The great plant growth conditions of the Polog valley have been well used for the development of agriculture. The well-known ski resort Popova Sapka lies above Tetovo in the Shar Mountain. An 18 km long asphalt road is leading you from Tetovo to Popova Sapka skiing center. While in winter tetovo is a popular destination for the skiing fanatics, in the summer tetovo is the beloved resort for paragliders.

The Monastery of Lešok with the churches of St. Athanasius and of the Church of the Holy Virgin are only 8 kilometers away from Tetovo, by the road leading to the village of Brezno. The Church of the Holy Virgin, built in 1326, is an excellent example of Byzantine style and architectural tradition. The church has three layers of frescoes. The 1st and bottom layer is from the first time of construction, the second and middle one was added sometime in the 17th century, and the third and top layer was added in 1879. Several marble columns from the original church can still be seen in the Tetovo museum. The church of St. Athanasius was built in 1924 next to the church of the Holy Mother of God. In the yard of the Monastery of Lešok is the tomb of the Macedonian educator Kiril Pejchinovik, who was born in 1770. In his honor, this monastery hosts an International Meeting of Literary Translators. Tetovo is also a host to the Festival of Macedonian Choirs.
 
 The best known mosque in Tetovo is the "Painted", or Aladzha Mosque which is found on the right bank of the Pena River or Shkumbim River. It was built in 1459 and known among residents of Tetovo as the Pasha Mosque. In the yard of the mosque there is an octagon-shaped turbe of Hurshida and Mensure, the two women that provided the money for the construction of the mosque. In the vicinity of Tetovo is the dervish tekke of Harabati Baba, which was established by the Bektashi Sufi order. The tekke was closed down by the communists following the end of the Second World War and in the 1980s the Macedonian government turned the tekke into an entertainment complex with a hotel, retaurant and disco. Following the desecration of several holy tombs by party-goers, the Bektashi community of Macedonia, under the leadership of Baba Tahir Emini (d. 2006), staged a sit in 1995 and have since reoccupied a considerable portion of the tekke grounds. A legal battle still rages over the true ownership of the Bektashi holy site.