Virudunagar is the headquarters of Virudunagar District. It is 48 kms South of Madurai, 26 kms north of sattur and 24 kms from Sivakasi. Legend says that this town was named after a warrior who was possession of a number of flags as a token of having conquered many others challenged the residents of this town. One resident accepted this challenge and in the fight killed the warrior and seized his flags.
From that time onwards the town came to be known as Virudukkal Vetti. Virudthukkal in Tamil means banners and patti in Tamil means hamlet. The Railway Station at this place was originally named Virudukkal vetti, but subsequently in 1875, was altered into Virudupatti. On 6th April 1923, the Council changed the name of the town to Virudunagar. Virudunagar is trading centre.
The principal trade here is cotton and cotton goods. Dried chillies, groundnut oil, coriander seeds, jaggery, grains etc, are exported to other places. There are wholesalers in Silver and red gram, gingelly, coffee seeds, pepper, chillies etc. There is a commercial crop regulated market for cotton, chillies and groundnut. This town is the birthplace of Thiru K. Kamaraj, former Chief Minister of Tamil Nadu and eminent leader in the Indian National Congress.