The city was probably built by the people of Byzantine Cappadocia, although the age is uncertain and could be older.

The Özkonak Underground City was discovered in 1972 by a local farmer named Latif Acar, who was curious about where his excess crop water was disappearing to. Latif discovered an underground room which, when later excavated, revealed a whole city which could house 60,000 people for up to three months. Although only four floors are now open, the complex contains a total of ten floors, to a depth of 40 m.

Unlike the other underground cities in this area, there were holes above the tunnels used for dumping hot sand on the enemy. Just like Kaymaklı and Derinkuyu, Özkonak has a water well, ventilation system, winery and moving stone doors.