Following the 1303 Conquest of Sylhet, Bayazid Shah, a companion of Shah Jalal, took refuge in Bulla and propagated Islam there. Bayazid remains buried in a mazar in Bulla bazaar. Lakhai was previously under the sub-registry of Charabhanga in modern-day Madhabpur Upazila. On 10 January 1922, the Lakhai thana was established as per Assam Province's gazette notification 176GK. During the Bangladesh Liberation War of 1971, a massacre was conducted in the village of Krishnapur on 18 September. The Pakistani Army also attacked the villages of Murakari and Bhabanipur. In the village of Madna, the army set fire to the house of Dewan Ali. On 29 October, the Pakistani forces took shelter in the houses of some brokers at night in Muriyauk. Early in the morning, they wanted to go tothe house of Shahjahan Chishti, a freedom fighter in Muriyauk. Unable to find Chishti at his house, the forces captured his sixty year old father, Abdul Jabbar, and set the house on fire. In the same village, the forces also captured 65-year old Idris Ali, father of Bengali freedom fighter Ilias Kamal. They then proceeded to kidnap the two old men to Lakhai Union. According to some sources, the next day the forces took a speed boat to Bhairab and the old men were shot dead on the way and were never found. In 1983, Lakhai was promoted to a designated police station through the efforts of many people. On 15 April 1983, the foundation was laid for a police station at Kalauk in Bhadikara Mouza, Bamai Union. In 1984, there was a circle officer development outpost in modern-day Swajangram in Lakhai Union.
At the 1991 Bangladesh census, Lakhai had a population of 110,319, of whom 53,164 were aged 18 or older. Males constituted 49.24% of the population, and females 50.76%. Lakhai had an average literacy rate of 21.6%, against the national average of 32.4%.
Economy
Lakhai consists of both plain lands and Haor areas, not only self-sufficient in food and fish but also exports, is famous for paddy, jute & winter corps.
Lakhai is connected through Habiganj, Ashuganj, Fandauk, Chatiain by road; Bhairab by launch and Shayestaganj, Shahjibazar, Nayapara by rail communications. Regional highway runs through Sarail, Nasirnagar, Lakhai, Habiganj route is important for road communications in this region. Lakhai–Dhaka and Lakhai–Sylhet direct bus services are available. Lakhai was river based upazila in the past. But nowadays it has developed immediately.
Education and culture
At the 2001 census the average literacy rate of Lakhai Upazila was 28.7%, where national average is 46.2%. In Dhaka several thousands people of Lakhai reside where most of restaurants, Bakarkhani shops, newspaper stores, self-employed persons are from Lakhai. Movements for establishing Sylhet Division were also organized by people of Lakhai as they are in large numbers in Dhaka. Lakhai is famous for pithas and hospitality, rich with cross cultures of greater Sylhet, Dhaka & Chittagong's flavour and foreign connections, it is unique of Bangladesh. There is a non-governmental orphanage in Battala called Nurul Huda Orphanage. Notable eidgahs are Mashadiya and Kataiya Eidgah and well known mosques are Teghoriya Mosque, Singhgram Masjid and Bhadikara Mosque. Important educational institutes are-
