Pahrump was originally inhabited by the Southern Paiute. It was slowly inhabited by settlers in the late 19th century. They reportedly chose the name for Pahrump after the original Southern Paiute name Pah-Rimpi, or "Water Rock," so named because of the abundant artesian wells in the valley. Because of the artesian wells, the new inhabitants of Pahrump Valley began a number of large ranch-style holdings, mostly over 1,000 acres (400 ha) in size.

On the ranches, alfalfa and cotton were grown, and livestock were raised. Until the 1960s, Pahrump had no telephone service except a radio transmitter phone in a phone booth next to the small market, and there were no paved roads in or out of the Pahrump Valley. As Las Vegas grew, real estate speculation became somewhat more popular in the area.

This led to the introduction of telephone service and the construction of a paved highway between Las Vegas and Pahrump during the late 1960s. Later, this road (NV 160) was extended from Pahrump northward to US 95, near Amargosa Valley. A second paved road (NV 372) was introduced that went from Pahrump to neighboring Shoshone, California, which provided a link to the Death Valley area, as well as a shorter route to those wishing to travel to Los Angeles or other areas in California.

In the fifties and sixties, there was a two-room elementary school and the high school students went to Shoshone. In 1974, Pahrump's first high school, Pahrump Valley High School, was constructed. Pahrump is an archetypal example of an exurb. Almost all significant agriculture has ended in the valley, and over the years the surface aquifers have been drained. Las Vegas casino owner Ted Binion buried a large treasure of silver in a secret underground vault in Pahrump.

In 1998, Binion died under suspicious circumstances, and one of the parties accused of murdering Binion was apprehended while digging up the vault in Pahrump. A book about the Binion murder trial (and Las Vegas poker) is Positively Fifth Street by James McManus. On November 15, 2006, the Pahrump town board voted for an ordinance declaring English the official language of business, forbidding the display of foreign flags, and denying any benefits to illegal immigrants.

A measure in the ordinance required an American flag to be displayed above any other flag, regardless of what organization, nation, or government it represented. The ordinance was repealed four months later because of bad publicity.On November 4, 2017, Koenigsegg Automotive AB achieved the highest top speed of a production car ever, surpassing the Bugatti Veyron.

The Koenigsegg Agera RS reached a top speed of 277.9 mph (447.2 km/h) on Nevada State Route 160.