Kalpitiya Fort was built by the Dutch between 1667 and 1676. Kalpitiya was important as it commands the entrance to the adjacent bay, Puttalam Lagoon. The surrounding Puttalam area was one of the major cinnamon cultivation areas in Sri Lanka. The Dutch even constructed a canal from Puttalam via Negombo to Colombo to transport cinnamon from the area.
Kalpitiya Fort has four bastions on each corner, each with its own guard post, with two smaller bastions facing the lagoon. Inside, the buildings are located around the periphery creating an empty space in the middle of the fort. The walls of a chapel, barracks, dining hall, commander's residence and prison are still evident, though the roofs have been replaced. There were two tunnels leading away from the fort — one led to the sea and the other to the Dutch Reformed Church approximately 400 m (1,300 ft) outside the fort. These tunnels are blocked and are inaccessible.
In 1795 the fort was surrendered to the British. The British continued with their military occupation of the Kalpitiya Fort till 1859.
Kalpitiya fort was neglected for many years until it was turned into a Sri Lankan Navy base for training and operational activity during the escalation of the Sri Lankan Civil War. The ramparts are in good condition today.