The Old Rudo, founded in 1555 as an endowment of Mustapha-Pasha Sokolović, who was a nephew of the well-known and far more famous Mehmed Pasha Sokolović, who was also born in this area – the village called Sokolovići. This ktetor (founder) built the bridge with five openings across the River Lim and afterwards other structures came which used to accompany construction of a settlement. A charshiya (market place) was built together with artisans’ workshops and other shops.

Rudo area, which is often referred to as the Lower Polimlje, belonged to the state and the dynasty of Nemanjić and, after the death of Stefan Dušan, the King od Serbia, this area was a part of the province under the authority of Nikola Altomanović and, later on, under the rule of the Serbian Prince Lazar Hrebeljanović. After Lazar’s death, Rudo and the surroundings were in the possession of the famous aristocratic family Pavlović, until the arrival of the Ottomans.

Rudo was under the Ottoman rule for 412 years. An event important for the establishment of the new Rudo was the Great Flood of 1896. After the great flood, when the swollen Lim wiped out the old settlement, during the Austro-Hungarian occupation, the new Rudo was established on the right bank of Lim.

The Austrian engineers made the urban plan of the new settlement, so that this was the first settlement in Bosnia and Herzegovina built by a modern urban plan.
In 1898 the construction was completed of a carriage road Rudo – Uvac, along the right bank of the River Lim, which connected Rudo with the newly built road Višegrad – Uvac, thus enabling a carriage-road connection with Višegrad.

The newly constructed narrow-gauge railway Međeđa – Uvac, as well as the construction of, at the time, modern train station in Rudo (1906), enabled a better transport connection.