Khandwa is an ancient city, with many places of worship, like many other cities in India. Most temples are Hindu or Jain. During the 12th century CE, it was a centre of Jainism. During British rule, it replaced nearby Burhanpur (now a separate district) as the main commercial centre of the Nimaad region.
Khandwa is a major railway junction; the Malwa line connecting Indore with the Deccan meets the main east–west line from Mumbai to Kolkata.
Khandwa has a major railway junction located on the Jabalpur-Bhusaval section of Howrah-Allahabad-Mumbai line, one of India's most heavily used railway lines, with daily connections to Mumbai, Pune, Delhi, Goa, Cochin, Kolkata, Indore, Bhopal, Patna, Allahabad, Lucknow, Jammu, Hyderabad, and Bangalore. It also has an airstrip which is rarely used for occasional aircraft landings, located on Nagchun Road.
Khandwa is famous for its local crops of cotton, wheat (Khandwa2), soyabean and a variety of seasonal fruits and vegetables. Its wheat variety Khandwa2 is famous nationwide for its aroma, colour and quality. Legendary actor/singer Kishore Kumar was born in Khandwa. Earlier Khandwa was the only city in Central India which cultivates cannabis (ganja).
Khandwa is known for its four Kunds located in four directions of the city, called Padam Kund, Bheem Kund, Suraj Kund and Rameshwar Kund. The famous tourist places of Khandwa are Dada Darbar khandwa,  Nagchun Talab and Hanumantiya Island, a new place for adventurous water sports in the back waters of Indira Sagar Dam. The town recently got fame due to the 2016 Hollywood movie Lion , which was based on the extraordinary search for his birth family by Khandwa born Saroo Brierley, who got lost as a child and ended up in Australia after being adopted.
A hydro power project called Indira Sagar Pariyojna is located close to Khandwa. Nepa paper mills, Mansingka oil mills, and Nimar textiles are a few well known names in industry located in the city.
The name of the city is derived from "Khandav Van", which literally means Khandav Forests.
Recent explorations in the beds/tributaries of Narmada have revealed traces of the Paleolithic men in East Nimar district. Omkar Mandhata, a rocky island on the bank of Narmada river, about 47 miles north-west of Khandwa, is said to have been conquered by the Haihaya king Mahishmant, who had named the same as Mahishmati. 
During the rise of Buddhism, the East Nimar region was included in Avanti Kingdom under Chand Pradyota Mahesana, which was later added to the growing empire of Magadha by Shishunaga. From the early 2nd century BC to late 15th century AD, the Nimar Region (earlier a part of Khandesh) underwent the ruling of many emperors from many dynasties, which include Mauryas, Shungas, Early Satvahanas, Kardamakas, Abhiras ( Ahir Gavli),  Vakatakas, Imperial Guptas, Kalchuris,  Vardhanas (of Harsha Vardhana fame), Chalukyas, Kanungos, Rashtrakutas, Paramaras, Faruki Dynasty  etc.
Khandwa has no remarkable history but the nearby Burhanpur has an interesting past from the Mughal period.
Prince Khurram was nominated as the Governor of the Deccan in 1617 AD, by Jahangir to succeed Prince Parviz, and was bestowed the title of Shah by Jahangir. Khurram led the Mughal army to a peaceful victory by which Jahangir was pleased with his success & conferred him the title of Shah Jahan on 12 October 1617 AD. After the death of Jahangir in 1627, Shah Jahan ascended the throne of Mughal empire. Due to troubled conditions in the Deccan, When Shah Jahan travelled to Balapur fort, Burhanpur, mother of Mirza Azam and elder daughter of Shahzada Badi uz-Zaman Mirza, alias Shah Nawaz Khan of the Safawi dynasty Dilrus Banu, wife of Auranzeb along with Mumtaz and cousin/brother Shah Beg Khan along with military personnel stayed three nights near Argaon at Hiwarkhed, before the birth of their fourteenth child.He reached Burhanpur (Deccan) on 1 March 1630, where he stayed for the following two years, conducting operations against Bijapur, Ahmadnagar, and Golkunda. On 7 June 1631, Shah Jahan lost his beloved & favourite wife Mumtaz Mahall at Burhanpur, and her body was buried at first in the Garden of Zainabad, across the river Tapti. Early in December of the same year (1631 AD), the remains of her body were sent to Agra. Later on 6 March 1632, Shah Jahan left Burhanpur for the north, after appointing Mahabat Khan as the viceroy of the Deccan.
From the mid-16th century to the early 18th century, the Nimar region (including East Nimar), was under the rule or influence of Aurangzeb, Bahadur Shah (Mughals), the Peshwas, Sindhia, Bawaniya, Holkar and Pawar ( Marathas), Pindaris etc. Later from early part of the mid-18th century, the management of the Nimar region came under the British.
The East Nimar district did not remain unaffected by the Great Uprising of 1857, which swept the country, against the British rule. In connection with the so-called Riots of 1857, Tatya Tope had gone through the region of East Nimar district, and Khandwa and before marching out of the district, burnt the police stations and Government buildings at Khandwa, Piplod and a number of other places and escaped again to central India by way of Khargone.
The East Nimar district was greatly affected with the beginning of freedom movement, Non-Co-operation movement, Civil Disobedience movement, Quit India Movement etc., to obtain the independence of India, from late 18th century until 15 August 1947. During this time Khandwa was visited by Swami Dayanad Saraswati of Arya Samaj fame, Swami Vivekanand, the great monk and founder of Ramkrishna Mission, Mahatma Gandhi in 1921, Lokmanya Tilak, and others. Gandhiji visited Khandwa on 21 May 1921. At that time people of Nimar District gave a "Manpatar" to Gandhiji,
Young Nationalists of the district, like Haridas Chatterjee, Makhanlal Chaturvedi, Thakur Laxman Singh (of Burhanpur District), Abdul Quadir Siddique attended the Calcutta Session of Congress in 1917. Tilak visited the district during his whirlwind tour of the central province in 1918. The district took part in the non-co-operation movement. Civil Disobedience Movement of 1930 has also been participated by many people of the district. The Karmavir weekly was seized and its editor, Makhanlal Chaturvedi was sentenced to two years. Editor of Swarajya S. M. Agarkar was also arrested and imprisoned. Nav Jawan Sabha was established at Khandwa in 1931. Students also participated in this movement. They removed Union Flags from high school building and hoisted the tricolor. In this connection Raichand Bhai Nagda was fined and imprisoned.
The District also has contribution in Quit India Movement. The District Political Conference was held at Harsud sometime before August, 1942 had alerted the people for impending struggle. The Students of Robertson High School, Burhanpur ( Burhanpur is now a new district but, formally part of Khandwa District) hoisted Tri-colour on the school building on 15 August. But it was removed by the police.The students organized the processions against this act of police until their demands of hoisting tricolor and pasting of photographs of national leaders did not met. Many monuments can be seen in Khandwa which were made at the time of British era. Like local Nagar Nigam building and girls degree college.
Notable natives and residents
- Makhanlal Chaturvedi
- Dada Darbar Khandwa
- Ashok Kumar
- Kishore Kumar
- Amit Kumar
- Saroo Brierley
- Shaan (singer)
Khandwa is located at  It has an average elevation of 313 metres (1026 feet)..
- The place has four historic kunds in its four direction namely Suraj kunda, Padma kund, Bhima kunda and Rameshwar kund. 
- Ancient Turja Bhavani Temple, Dada Dhuni wale ki samadhi, and modern Nav-chandi Devi Dham are the places of faith and worship of Hindus.
- The buildings of Collector office, Girls Degree College, Ghantaghar are among the old monuments.
As of 2001 India census,  Khandwa had a population of 171,986. Males constitute 52% of the population and females 48%. Khandwa has an average literacy rate of 71%, higher than the national average of 59.5%: male literacy is 77%, and female literacy is 66%. In Khandwa, 13% of the population is under 6 years of age.