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Thought to have originated in the mid-10th century, it was first mentioned as Rusa (Cyrillic: Руса) in chronicles for the year 1167 as one of three main towns of the Novgorod Republic, alongside Pskov and Ladoga. After Pskov became independent, Russa became the second most important town and trade center of the Novgorod Republic after Novgorod itself. By the end of the 15th century, it contained about one thousand homesteads. Brine springs made the saltworks the principal business activity in the town, which was the biggest center of salt industry in the Novgorod region.
The wooden fortifications of Russa burned to ashes in 1190 and then in 1194, after which they were replaced by the stone fortress. In 1478, it was incorporated into the Grand Duchy of Moscow together with Novgorod. The word Staraya (Old) was prefixed to the name in the 15th century, to distinguish it from newer settlements called Russa. Nevertheless, the current name firmly established only in the 19th century, when the salt mining settlements around the town became collectively known as Novaya Russa (New Russa).
When Ivan the Terrible ascended the throne in 1533, Staraya Russa was a populous town. During the Time of Troubles, it was held by Polish brigands and heavily depopulated. Only thirty-eight people lived there in 1613.
In the course of the administrative reform carried out in 1708 by Peter the Great, Staraya Russa was included into Ingermanland Governorate (known since 1710 as St. Petersburg Governorate). In 1727, separate Novgorod Governorate was split off. In 1776, Staraya Russa became the seat of Starorussky Uyezd of Novgorod Viceroyalty. In 1796, the viceroyalty was transformed into Novgorod Governorate.
Catherine II appointed German mineralogy expert Franz Ludwig von Cancrin as director of the salt-works in 1783. In the 1820s, military settlements were organized in Staraya Russa and around, in accordance with the project designed by Aleksey Arakcheyev, an influential statesman. It was inconvenient to have both civil and military administration in Staraya Russa, and therefore the uyezd was abolished in 1824. The town of Staraya Russa and some adjacent territories were directly subordinated to the Defense Ministry. The military settlements were proven inefficient, in particular, in 1831, the area participated in the Cholera Riots. They were abolished in 1856. In 1857, Starorussky Uyezd was re-established.
The Soviet authority in Staraya Russa was established on November 5, 1917.
In August 1927, the uyezds were abolished and, effective October 1, 1927, Starorussky District was established, with the administrative center in Staraya Russa. Novgorod Governorate was abolished as well and the district became a part of Novgorod Okrug of Leningrad Oblast. On July 23, 1930, the okrugs were abolished and the districts were directly subordinated to the oblast.
On September 19, 1939, Staraya Russa was elevated in status to that of a town of oblast significance and thus ceased to be a part of the district.
The town of Staraya Russa was from 1941 to 1944 heavily damaged given the 3-and-a-half-year German occupation that resulted in the deaths of many of its citizens and giving it a big role in the resistance effort, leading to its February 1944 liberation by the 1st Shock Army as part of the Leningrad–Novgorod Offensive that winter. As the city showed “courage, endurance and mass heroism, exhibited by defenders of the city in the struggle for the freedom and independence of the Motherland” during the years of its Axis occupation and the resistance of its residents against the enemy, on April 9, 2015, as part of the national celebrations of the 70th year anniversary of Victory Day, by virtue of Presidential Law No.2015-175 of President Putin, the "City of Military Glory" title was given at long last to this old town in Novgorod Oblast.