Prior to the coming of Europeans, San Angelo was the center of the Jumano people. The area had been inhabited for thousands of years by succeeding cultures of indigenous peoples. In 1632, a short-lived mission of Franciscans under Spanish auspices was founded in the area to serve the Indians. The mission was led by the friars Juan de Salas and Juan de Ortega, with Ortega remaining for six months. The area was visited by the Castillo-Martin expedition of 1650 and the Diego de Guadalajara expedition of 1654.

The current city of San Angelo was founded by European Americans in 1867, when the United States constructed Fort Concho as one of a series of new forts designed to protect the frontier from hostile threats. The fort was home to cavalry, infantry, and the famous Black Cavalry, otherwise known as Buffalo Soldiers by Native Americans.

The settler Bartholomew J. DeWitt founded the village of Santa Angela outside the fort at the juncture of the North and South Concho Rivers. He named the village after his wife, Carolina Angela. The name was eventually changed to San Angela. The name would change again to San Angelo in 1883 on the insistence of the United States Postal Service, as San Angela was grammatically incorrect in Spanish. The town became a trade center for farmers and settlers in the area, as well as a fairly lawless cow town filled with brothels, saloons and gambling houses.

After being designated as the county seat, the town grew quickly in the 1880s, aided by being on the route of newly constructed railroads. It became a central transportation hub for the region. The Santa Fe Railroad arrived in 1888 and the Kansas City, Mexico and Orient Railway in 1909. After a tuberculosis (TB) outbreak hit the United States in the early 1900s, many patients moved to San Angelo. At the time, doctors could only recommend rest in dry, warm climates. TB sufferers went to San Angelo for treatment.

In 1928, the city founded San Angelo College, one of the region's first institutes of higher education. The city had been passed over by the Texas State Legislature to be the home of what would become Texas Tech University. San Angelo College, one of the first municipal colleges, has grown to become Angelo State University. The military returned to San Angelo during World War II with the founding of Goodfellow Air Force Base, which was assigned to train pilots at the time. San Angelo grew exponentially during the oil boom of the 1900s, when vast amounts of oil were found in the area, and the city became a regional hub of the oil and gas industry.