The Kansas Pacific Railway granted and platted the land for the Town of Deer Trail on November 11, 1875. Early records indicate that the Evergreen Cemetery was platted at the same time.

Several stage routes came through or near where Deer Trail is located carrying mail and passengers. Many wagon trains followed these routes.
When the railroad was laid here in 1870, a station was built. In later years, a large stockyard, water tank, coal chute and section houses were constructed. Deer Trail became one of the important shipping points in eastern Colorado for livestock, grain, cream, eggs, and other products.

Many cattlemen brought large herds from New Mexico and Texas. Large roundups of several thousand head of cattle were held in the spring for branding calves and again in the fall to ship and sell cattle. Chuckwagons and bed wagons were a familiar sight at these roundups.

Deer Trail was also once a prominent sheep ranching center. The period between 1865 and 1900 saw many long sheep drives for purposes of marketing sheep and stocking the ranges.

Before the turn of the century, several businesses and homes were built. In the early 1900s, several churches were established. In 1918, Deer Trail's two banks consolidated and became the First National Bank of Deer Trail.

In 1920, the Town was incorporated. At that time, the Deer Trail light plant opened as well as a flour mill which later was destroyed by fire in 1921. A Fair Association was formed in 1920. The group constructed a regulation one-half mile track, grandstand, and pavilion. An artesian water well was drilled and a water tower erected in 1923. The Town boasted two banks, two lumber companies, two barber shops, three hotels, five grocery stores, several cream stations, a drug store, fashion shop, theater, bakery, doctor and dentist offices, real estate office, elevator, newspaper, and numerous cafes. The town prospered until the depression in 1930.

In 1930, main street was graded and graveled. In 1937, a swimming pool was built near the center of town.

In the 1960s, many people were employed on a missile base site northeast of town until it was abandoned in 1968.

In June of 1965, a devastating flood destroyed Deer Trail's businesses on Main Street. Many houses were washed off their foundations and the railroad track sat up on its edge like a picket fence. All highway and railroad bridges were washed out. Damage to the business district was so great that most of it was never rebuilt.

Service was discontinued at the railroad depot and the doors were closed on June 27, 1969 after nearly 100 years of service to the community. The depot building was moved to the Pioneer Historical Museum grounds.

In the 1970s, the Peoria oil field northwest of town had nine wells in production, one of the largest fields in the state.

Today, one of Deer Trail's major employers is Deer Trail School District 26J. Enrollment for grades K-12 is approximately 200 students. Other major employers in the area are Colorado Department of Transportation and Arapahoe County. Ranching and farming are still very prevalent in the area.