The town was organized in September 1880 to serve the San Juan mining district. The Denver and Rio Grande Railroad (D&RG) chose the site on the Animas River for its depot following a brief and most likely perfunctory negotiation with Animas City, two miles to the north. The city was named by ex-Colorado Governor Alexander C. Hunt after Durango, Mexico, based on his favorable impression of that city resulting from a scouting trip undertaken on behalf of William J. Palmer, the head of the D&RG.

Area archaeological sites on the State and National historical registers include:

• Mesa Verde National Park, a World Heritage site
• Chimney Rock National Monument, the most northeastern known outpost of the Ancestral Puebloans
• Durango Rock Shelters Archeology Site, a Basketmaker and Pueblo culture
• Spring Creek Archeological District, a Basketmaker and Pueblo site
• Talus Village, a Basketmaker site

-Wikipedia