During the year of 1890, explorers in the area, asked the French governor-general, Paul Doumer, to create a resort center in the highlands. The governor agreed. The original intended site for the hill station was Dankia, but Étienne Tardif, a member of the road-building expedition of 1898-99, proposed the current site instead. In 1907, the first hotel was built. Urban planning was carried out by Ernest Hébrard.
The French endowed the city with villas and boulevards, and its Swiss charms remain today. Hébrard included the requisite health complex, golf course, parks, schools, and homes but no industry. The legacy of boarding schools where children from the whole of Indochina were taught by French priests, nuns, and expatriates still existed as late as 1969. In 1929, the Christian and Missionary Alliance established a school (Dalat International School) for Canadian and American children of missionaries serving in south-east Asia. In 1965, the school moved to Bangkok, Thailand; then in 1966 to the Cameron Highlands in Malaysia and then, in June 1971, moved to its present location in Georgetown, Malaysia.
During World War II, Đà Lạt was the capital of the Federation of Indochina, from 1939 to 1945.
In the mid-1950s, the Vietnamese Scout Association established their national training grounds at Đà Lạt.