The origins of the village settlement lie in the Nine Year's War also called Tyrone's Rebellion. In 1597 there was a battle in Tyrrellspass and the Irish, between 300 and 400 strong and led by Richard Tyrrell, attacked and defeated the English army. Out of 1,000 English troops only one survived.
There is a historic castle on the edge of the town, built by Tyrrell, a chief ally of Aodh Mór Ó Néill in the Nine Years' War. It is the only remaining castle of the Tyrrells, who came to Ireland around the time of the Norman Invasion.
The village has a distinctive green and crescent of houses, including the Church of Ireland church and what was previously the court house, that was redeveloped c.1820 under the patronage of Jane MacKey, Countess of Belvedere (d.1836). The Catholic Church of St. Stephen is located across from Tyrrellspass Castle.
The Belvedere Protestant Children's Orphanage operated in Tyrellspass, from 1842 until 1943.
During the 1916 Easter Rising, some rebels barricaded a house in Meedin, Tyrrellspass, with the intention of waiting for reinforcements and then attacking surrounding police barracks. Local legend has it that Michael Collins stayed in this house the home of the Malone's, who still occupy the house. The RIC attempted to capture the house on three occasions. Twice they were repelled with gunfire, before they eventually succeeded on the Wednesday after Easter week, and arrested the two remaining rebels Thomas and Joseph Malone. They were the last two men captured under arms during the Rising.