Cañon City straddles the easterly flowing Arkansas River and is a popular tourist destination for sightseeing, whitewater rafting, and rock climbing.

Cañon City was laid out on January 17, 1858, during the Pike's Peak Gold Rush, but then the land was left idle.

This town was originally intended as a commercial center for mining in South Park and the upper Arkansas River.

[12] In 1861, the town raised two companies of volunteers to serve with the Second Colorado Infantry during the American Civil War.

This regiment fought in skirmishes in nearby New Mexico and as far east as the Indian Territory (Oklahoma) and Missouri before ending its organization in 1865.

In 1862, A. M. Cassaday drilled for petroleum 6 miles (10 km) north of Cañon City, close to a known oil seep.

Incarcerated workers contributed significantly to the development of the city, including the construction of Skyline Drive by 60 inmates.

[15] A number of metal ore smelters were built in Cañon City following the discovery of gold at Cripple Creek in 1891.

The area being situated along the Arkansas River has allowed for soil suitable to orchards, ranching, and farming, but has largely grown to rely on the large number of state and federal prisons in the area, as well as to tourism, education, manufacturing, medicine and many other sectors.

Cañon City depends on the Colorado Department of Corrections and federal prison system, and its tourism industry which includes the Royal Gorge Route Railroad, Royal Gorge Bridge and Park, Red Canyon Park, The Abbey winery, and various other attractions.

Prisons have served an important significance to both Cañon City and the surrounding areas of Fremont County, as well as to the state of Colorado.

The Museum of Colorado Prisons has been given the role of preserving and presenting the past of the state's corrections system.

[32] The Colorado Women's Correctional Facility near Cañon City in unincorporated Fremont County was decommissioned on June 4, 2009.

[citation needed] Cañon City is home to a daily newspaper, called the Cañon City Daily Record; an FM radio station, Star Country 104.5 FM; and a long-running AM radio station, known as KRLN NewsRadio 1400 AM.

The town is served by the Fremont County airport (1V6) which is 6 miles to the East and currently has no scheduled passenger service.

The movie Canon City (1948) depicts the real-life 1947 escape of 12 prisoners from nearby Colorado State Penitentiary.

[39] A fictional version of the city is depicted in Philip K. Dick's alternate history novel The Man in the High Castle (1963) and its eponymous 2015 television series adaptation.