Lugait got its name for a legend told from generation to generation. Years ago the place was close to the haven of pirates. From time to time these pirates attacked the place. The pirates were armed with superior weapons that easily vanquished the settlers. Lives and properties were destroyed. It caused pains and sufferings that vengeance was the order of the day. Inhabitants of the place called for a "LUGA" (to kill) and "HAIT" (bladed weapons) or literally translated as use of bladed weapons to avenge the lives and properties that were destroyed by the pirates. So that every pirate that attacked the place was subjected to this community self defense. It was then that the place was known as "LUGA-HAIT" or LUGAIT. A place where no pirates would dare to come for fear of the vengeance of its inhabitants.

Lugait is a melting point of cultures. It was historically part of the pat-a-pangampong (4 sultanates of Lanao) particularly the Sultanate of Balo-i (now municipality of Balo-i, Lanao del Norte) whose territory include such area as Tagoloan (municipality of Tagoloan, Misamis Oriental). It has also the influenced of the Higaonon tribes being located in the boundary of the province of Bukidnon. There were Chinese settlers who came to do commerce. However, most of the population now is composed of those who migrated from other places of the country such as Cebu (especially those from municipality of Sogod); Bohol; Ilo-ilo;Surigao; and Bukidnon.

As a local government unit of the republic, it started as one of the barrios of Initao, Misamis Oriental. When Manticao, Misamis Oriental became a municipality separate from Initao, Lugait was its biggest barrio in terms of land area population and revenue contribution. March 16, 1961 President Carlos P. Garcia signed an Executive Order No. 425, creating the municipality of Lugait.