Malayer is one of the southern townships of Hamadan province, with a temperate and mountainous climate. Mostowfi narrates that Nahavand comprised of 100 villages divided into three portions named as, Malayer, Esfidhan and Jeyqooq. The city of Malayer stands 83 km. south east of Hamadan, and 418 km. from Tehran. There are many versions as to its name.
It is said that during the time of the Medes, fire would be lighted on the hills to send out information to other parts of the territory from here. This area was therefore known as Mel Agar, which meant 'fire hill.' This is the current township of Malayer, which thrived from long past. Fathali Shah was responsible for the construction of what is now the city of Malayer today. It was in the year 1188 AH. that this place was inaugurated by Mohammad Ali Mirza Daulat Shah, and in honor of the founder was called Daulat Abad. But later on during the Pahlavi rule was changed to Malayer.