Lalganj was founded by, and named after, Lal Singh of Simarpaha.

At the turn of the 20th century, Lalganj was described as "a flourishing little market town" that served as the second-most-important bazar in the district, behind Raebareli itself. It hosted markets twice a week and traded hides, cloth, and oilseeds with Kanpur. Because of the town's growing importance, the road between Lalganj and Raebareli was metalled in 1902 through 1904. At around that time, Lalganj had a police station, a post office, a cattle pound, and a large primary school, as well as a road inspection bungalow that had recently been built. The town had a large Bania population as well as a Bais colony. Lalganj was then technically part of the village of Datauli Lalganj; Datauli had been founded by Sheo Singh, an ancestor of Lal Singh.

According to the 2011 census, Lalganj has a population of 23,124 people, in 3,996 households. The town's sex ratio is 914 females to every 1000 males, which is the lowest among towns in Raebareli district; 12,082 of Lalganj's residents are male (52.2%) and 11,042 are female (47.8%). The 0-6 age group makes up about 10.3% of the town's population; the sex ratio for this group is 857, which is also the lowest in the district. Members of Scheduled Castes make up 14.78% of the town's population, while members of Scheduled Tribes make up 0.12%. Lalganj's literacy rate was 86.07% (counting only people age 7 and up), which was the highest among towns in the district; literacy was higher among men and boys (91.2%) than among women and girls (80.5%).[1] The scheduled castes literacy rate is 75.52% (84.15% among men and boys, and 65.74% among women and girls)

In terms of employment, 23.09% of Lalganj residents were classified as main workers (i.e. people employed for at least 6 months per year) in 2011. Marginal workers (i.e. people employed for less than 6 months per year) made up 5.81%, and the remaining 71.10% were non-workers. Employment status varied significantly according to gender, with 47.08% of men being either main or marginal workers, compared to 9.01% of women

55.63% of Lalganj residents live in slum conditions as of 2011. There are 10 slum areas in Lalganj: Adarsh Nagar, Chaman Ganj, Chikvahi, Domahi, Mahesh Kheda, Pure Baba, Ali Nagar, Krishna Nagar, Sudan Kheda, and Pure Debi. These range in size from about 101 to 455 households and have between 8 and 13 tap water access points. The number of flush toilets installed in people's homes ranges from 91 to 338. All 10 areas are serviced by a mix of open and closed sewers