Užpaliai is a small town located on both sides of the Šventoji River and serves as the center of the Užpaliai municipality. This town began to take shape in the 16th century when it was established near one of Gediminas' estates and alongside an ancient trade route connecting Vilnius and Riga. This geographical position contributed to the growth of Užpaliai as an important trade center. In 1792, Užpaliai was granted Magdeburg rights, which conferred the status of a free town and a coat of arms symbolizing the importance of local flax cultivation and trade. The coat of arms was officially restored in 1998.
The origin of the town's name is explained in various ways; it is believed to be related to a tributary of
the Šventoji River called Užpala or to the marshes that once existed in the area (from the words “už” meaning “beyond” and “palios” meaning “marsh”). Užpaliai was first mentioned in written sources in 1261, but its history dates back to the Stone Age. Over time, Užpaliai evolved from a castle into a manor, then into a district, and is now a municipality. In the center of the town, a memorial stone was erected in 2000 to commemorate two significant dates: 1233, marking the Lithuanian victory over the Livonian Order and the battle led by Duke Rimgaudas, and 1792, when the Magdeburg rights were granted. The monument is adorned with a coat of arms and an inscription: “Cities Grow Through Trade.”