The city was named after the creek of the same name which flows through its center; this had been named by early French explorers, as France had claimed this territory through the eighteenth century. The name Papillion is derived from the French term (papillon) for butterfly. According to local tradition, the early French explorers named the creek as Papillon because they saw so many butterflies along its grassy banks.

The spelling was changed through a transliteration of the French word. Papillion was platted in 1870 when the railroad was extended to that point. Papillion (sometimes referred to as "Papio" by its residents) is one of the last of the late 18th-century, Paris-inspired frontier cities left in the Midwestern United States. Halleck Park, a recreation area in the heart of the city, includes many trails, open spaces, trees and a number of areas of interest, including Papio Fun Park, Papio Bay Aquatic Park, Papio Pool, and Papio Bowl.

The park also offers tennis courts, volleyball courts, playgrounds, "The Duck Pond", Monarch Field ("The Pit"), and E.A. Fricke Field. It also has nine other softball diamonds within the park for youth. The diamonds are sited on three fields: Halleck, Blonde, and Papio Bay. Village Park, Papio Bay Aquatic Center (including two water slides and a zero depth pool) and Walnut Creek recreational park are among the other recreational amenities in the city. Papillion Middle School is in the downtown area south of Papio Creek; the building formerly was used as the high school until August 1971.

The former junior high was located directly west, across the street. Also downtown are the Old A.W. Clarke banking house, Sump Memorial Library, Portal One-Room School House, Papillion Municipal Building (Sarpy County Courthouse until 1970), and the John Sautter House. Other areas of interest in Papillion include the Sarpy County Court House and Jail, Shadow Lake Towne Center, and Midlands Hospital, all along Nebraska Highway 370 in the southern portion of the city. Papillion has a Triple-A Minor League Baseball team.

Werner Park, located 3 miles (4.8 km) west of the city on Highway 370 in unincorporated Sarpy County, opened in 2011 as the new home of the Omaha Storm Chasers of the Pacific Coast League. The Storm Chasers were formerly the Omaha Royals; after 42 years at Rosenblatt Stadium in south Omaha, the team moved out following the 2010 season and changed their nickname.

They have been the only Triple-A affiliate of the Kansas City Royals, an expansion club that entered the American League in 1969. In conjunction with Major League Baseball's restructuring of Minor League Baseball in 2021, the Storm Chasers were placed into the new Triple-A East.