[4] The area was inhabited by Tiwa peoples from nearby Picuris Pueblo, then settled by Spanish colonists under the 1725 Embudo Land Grant.

The original name was El Puerto del Embudo de Nuestro Señor San Antonio and the grant was made in 1725, to Francisco Martín, Lázaro Córdova and Juan Márquez.

The aldea was known as San Antonio del Embudo until around 1900 when a post office was established and the name was changed to Dixon, reputedly to honor Collins Dixon, a school teacher who taught here in the late 19th century; one tradition has him being a Civil War army deserter; his descendants live around nearby Española.

The substantial number of artists and craft people living in the area led to the 1982 creation of the Dixon Studio Tour which annually draws many visitors during the two days in November that it occupies.

Annual summer stonecarving workshops are held at Southwest Stoneworks adjacent to Rift Gallery.