Chos Malal was founded on 4 August 1887 by Colonel José Olascoaga.

The city was the capital of the Territorio del Neuquén until 1904 when the capital and administrative buildings were moved to Neuquén, capital city of the Confluencia Department, the arrival there of the railway having provided an economic boost which helped the city of Neuquén to grow very rapidly.

The name Chos Malal derives from Mapuche words meaning "yellow corral" – from the distinctively yellow colour of the sedimentary flagstone rock that predominates in the hills surrounding the city.

Chos Malal has a semi-arid climate (Köppen BSk), with cold winters and hot summers; during the winter there are regular snow storms.

The Jose Olascoaga historical museum located in the city has exhibits of many historical pieces of the Conquest of the Desert such as documents, soldier's equipment and Mapuche objects.