The Phi Pan Nam Range runs across the province from north to south. The city of Phayao is on Phayao Lake (Kwan Phayao) in the valley of the Ing River. Three big mountains surround the valley, the Doi Luang (1,694 m), Doi Khun Mae Fat (1,550 m) and Doi Khun Mae Tam (1,330 m).
Phayao was founded in 1096 as a small city-state kingdom. In the 13th century it gained enough importance to be an equal partner with King Mengrai of Lan Na and the Sukhothai kingdom. However. a later king of Lanna and Nan captured Phayao in 1338, and made it part of Lanna. During the Burmese rule of Lanna, the city was deserted. In 1897 it became part of the province of Chiang Rai. On 28 August 1977, Phayao was separated from Chiang Rai and became a province of its own.