The town was founded by the Lucani, and later was conquered by the Greek colony of Metaponto. The name is most likely of Roman origin, stemming from the Hostilii family, who owned it. After the fall of the Western Roman Empire, it fell under the Lombards, and was part of the medieval Principality of Salerno. In 1070 it was given to the bishops of Tricarico.

In 1274 King Charles I of Anjou gave it as a fief to Giacomo di Bosciniano. The powerful Neapolitan family of the Carafa acquired it in 1289. In 1556 the whole fief passed under the Spanish Dukes the Medina, who made it capital of the Basilicata province. In 1806, after the abolition of feudalism, Stigliano went under the direct administration of the Kingdom of Naples and later the Kingdom of the Two Sicilies and, in 1861, became part of the newly unified Kingdom of Italy.

During the Fascist era Stigliano was an exile place for Fascist dissidents.