Chai Wan district was a part of Nong Han district. It was created as a minor district on 3 January 1977, when the two sub-districts Chai Wan and Nong Lak were detached from Nong Han District. In 1979 the third sub-district, Kham Lo, was created and the fourth sub-district Phon Sung transferred from Nong Han. The minor district was upgraded to a full district on 1 February 1988.
The district is divided into four sub-districts, which are further subdivided into 51villages. Chai Wan is a sub-district municipality which covers parts of tambon Chai Wan. There are four tambon administrative organizations.