The two parishes Särna and Idre were ceded to Sweden from Norway under the treaty of Brömsebro on 13 August 1645. In 1971 the three municipalities Särna, Idre (which itself had been split off from Särna in 1916) and Älvdalen were amalgamated to form the present municipality.

Älvdalen literally means River Valley, a name stemming from the area around the town Älvdalen, situated along the Österdal River, in the municipality's southern part.

The middle part of the coat of arms is meant to depict the landscape: streams and hills.

Geographically, it is considered divided into three parts. From north to south: the mountainous (fjäll) part, the forest part, and the valley (Älv) part.

The northern part is located within the Scandinavian mountain range. It has cultural influences from the native Saami people.

Idre, with about 800 inhabitants is a notable skiing resort.

This part has some high mountains including Storvätteshågna at 1,204 meters and Städjan at 1,131 m. The Töfsingdalen National Park is also located in the northernmost parts.

The Northern part is the northernmost point of Svealand, one of the three crowns under the Swedish throne.

The forest part has forests, with the national park Fulufjället also belonging to this part. Its influences come from it bordering to Norway, and its history has many examples and remains from its border conflicts. To symbolize this, the lower part of the coat of arms depict a crossbow. The point furthest away from any seas in Scandinavia is located here.

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