First settled by the Cherokee Native Americans, the area of Woodfin was settled by the Europeans and remained largely agricultural. Woodfin is named after Nicholas Woodfin, a major political figure in Western North Carolina's history serving as a state senator, humanitarian reformer, Army officer, businessman and farmer. In the middle 19th century, manufacturing and mills became established to take advantage of the natural power source of the rivers. Over time, the mills expanded and created villages for the workers leading to the gradual change to a suburban area. In 1971 the Town of Woodfin was incorporated and has remained true to the vision a distinct community where tradition and family are still valued.

Although manufacturing remains an important part of Woodfin's economy, in the past 20 years, Woodfin began a transition into a bedroom community of people who appreciate the small town community, but still want all the comforts offered by a larger city.