[3][4] The town was established in 1967 to support the nearby United States Naval Communication Station Harold E. Holt.

Beginning in the late 1970s, the town began hosting United States Air Force personnel assigned to Learmonth Solar Observatory, a defence science facility jointly operated with Australia's Ionospheric Prediction Service.

After the retreat from Java in March 1942, Allied naval forces required a forward base for replenishing submarines, then the sole form of offensive warfare against the Japanese.

Both Darwin, Northern Territory, and Broome, Western Australia, were too exposed to air attack, so a 500-ton[vague] unmotorized lighter was placed as a refueling barge near the mouth of Exmouth Gulf, where the Allies were already maintaining a seaplane tender.

Z Special Unit used Potshot as a staging base for Operation Jaywick, a raid on Japanese shipping in Singapore Harbour, in September 1943.

So the protection measures on the plane forced a 16° pitch down twice and brought negative G-forces on all passengers and it made them float for about 15 seconds.

[9][full citation needed] Some of the most famous snorkeling spots include Turquoise Bay and Oysters Stacks.

[16][full citation needed][17] In April 2014, Exmouth was hit by a massive flash flood, nearly destroying the caravan park and seriously damaging much of the town's infrastructure, causing a severe blow to tourism in the region.