In Roman times the area was crossed by Via Annia, linking Rome to Aquileia. The Roman trace can still be seen in the Bibione pinewood, where there are traces of a villa called "Mutteron dei Fratio". In the early Middle Ages the area was a border trade center between Venice and the Byzantine empire, with a garrison post. After the fall of the Eastern Roman Empire in 1453 it was reduced to a fishermen's village, under the influence of Venice, until in 1797 was delivered to Austria by the Treaty of Campoformio.
During the Napoleon's domination (1805-1814) the river divided the town into two municipalities: Latisana (left side) and San Michele (right side). Later on San Michele became an autonomous commune of the the Province of Venice, and became part of the kingdom of Italy after the 3rd War of Italian Independence in 1866.
During the First World War, after the Italian defeat at Caporetto, Ssan Michele was occupied for a whole year by the Austrian-Hungarian troops, who sacked everything possible, even the bells of the parish church, burning and destroying all that could not be brought away.
A still more tragic devastation, however, took place from 14 may 1944 to 1 May 1945, with dozens of allied air raids that almost razed to the ground the historical center, for which San Michele al Tagliamento was called the Cassino of Northern Italy.