By the Middle Ages, the town was already thriving and was the home to several powerful families. Pilgrims stopped in the town on the way from the Rhône valley to the shrine of the Virgin Mary at Puy-en-Velay. The town was plundered several times by invading armys and armed bands, and suffered during the Hundred Years' War, despite the wall that were built around the town.
In the first half of the 16th century, the town was influenced by Luthean and Calvinist ideas and there were several skirmishes between protestants and catholics, with several "heretics" being burnt alive. The population had reached 3,500 by the start of the religeous warss in 1562. The wars were used as a pretext to deprive the town of its prosperity. The nearby castle of Pugneux was badly damaged on two occassions. 1585 to 1586 were especially disastrous, with not only war, but famine and the plague. Fortunately calm and prosperity retunded after the 1598 Edict of Nantes.
On June 4, 1783, Annonay was the location of the Montgolfier brothers first public unmanned hot air balloon flight. The event is celebrated annually each June, on the site of the flight in the place des Cordeliers.
Annonay has a strong industrial tradition. In the past Annonay was noted for its leather goods. Although the industry has declined, the Tannerie D'Annonay (Tannery) continues the tradition under the Grison brand.
The multinational paper company Arjo Wiggins' subsidiary Papétries Canson et Montgolfier SA, which dates back to 1557 (and is linked to the Montgolfier brothers?), owns three of the several paper factories in the town.
Other industries in or close to the town include plastics, textiles, and pharmaceutical companies including Ciba, Aguettant and Tetra Médical.
There are a number of vineyards near the town.
The average salary in the area is 23,300 euro.