Dalmore was founded in 1839 by Alexander Matheson, a partner in the renowned Far East trading company Jardine Matheson, which was established by his uncle Sir James Matheson and quickly became the largest British trading firm in the Far East. In the 1850s, the distillery was managed by Mrs. Margaret Sutherland. In 1867, the land lease was transferred to Andrew Mackenzie (aged 24), a beneficiary of the Matheson estate. His mission was to 'expand the business,' and with the help of his brother Charles, he did just that, doubling the distillery's capacity by 1874 through a new still house and an unusual set of stills (see below). Their descendants managed Dalmore (and owned the distillery after 1891) until 1960, when the company merged with Whyte & Mackay—a firm that had enjoyed a friendly working relationship with them from the very beginning. Ownership of Dalmore distillery was transferred in 2007 to the United Spirits Division of United Breweries Group of India, which had acquired Whyte & Mackay. The company formulated a plan to double production capacity, and in 2012 announced that this initiative would be implemented when United Spirits was sold to Diageo. The transaction was completed in 2014, but Diageo was required by the Office of Fair Trading to immediately sell Whyte & Mackay. Whyte & Mackay and its distilleries and brands were acquired in 2014 by Emperador of the Philippines (see 'Invergordon' for details).

Andrew Mackenzie was an innovator. He was one of the earliest distillers to use "standard distillery barrels" (new or re-casked barrels) for aging whisky for five to six years before finishing in sherry casks. Through Alexander Matheson's network in Asia and Australia, he became one of the first to sell single malt Scotch whisky in the Far East, making Australia Dalmore's largest export market—a position it held until 1938. Dalmore has several unusual and even unique features. The enormous wort receiver—six meters wide—is made of pine. Previously, it was equipped with two paddles connected to a long wooden plough, which operators had to walk around pushing to stir the wort and prevent sediment from mixing into the wash stills before distillation. The distillery's stills are said to be the oldest in the Highlands. Parts of one can be traced back to 1874. Four wash stills have flat tops instead of the usual "swan necks." This makes the resulting spirit heavier and more distinctive. Four spirit stills have unique "water jackets" (first installed in 1839) around their necks, continuously cooling the copper, increasing reflux, and making the spirit lighter. Interestingly, the condensers for the spirit stills are placed horizontally outside the still room. Additionally, one spirit still is twice as large as the other three, which is also unique. The spirit from this still carries more citrus fruit and aromatic spice notes, while the smaller stills produce richer, more robust flavors. There are four spirit safes in the still room, one of which has an unusual design and a long history. The royal stag emblem now adorning Dalmore bottles began use in 1886, evoking a historical event: in 1263, an ancestor of Clan Mackenzie saved King Alexander III from a charging stag, earning the right to use the stag emblem. The distillery's name means "big meadowland," confirmed by its geographic location—on the plains overlooking Cromarty Firth. During WWI, the distillery warehouse was requisitioned by the navy for mine manufacturing. The pier below the distillery was built by the navy and called the "Royal Navy Pier." Drew Sinclair retired in 2006 (passing away shortly after) after 40 years as Dalmore's manager. In April 2005, a limited 12-bottle release of Dalmore 62-Year-Old sold privately for £32,000, setting a world record at the time. (In fact, this bottle contained a blend of whiskies from 1868, 1878, 1926, and 1939.) The buyer immediately opened it and drank it with friends. In 2017, a unique 12-bottle collection of Dalmore (the oldest distilled in 1926) selected by legendary master blender Richard Paterson was sold for £1 million, setting a world record. Earlier that year, to commemorate Paterson's 50 years in the whisky industry, 50 bottles of Dalmore 50-Year-Old were bottled and sold. All these bottles were sold by year-end, each priced at £50,000. On February 2, 2017, another record was broken when a bottle of Dalmore Eos 59-Year-Old sold for £83,640 in Hong Kong.