In the first half of the 19th century, the region was a hunting ground for Comanche, Ute, and Jicarilla Apache Indians.

[7] Folsom prospered in the early years, with the largest stockyards west of Fort Worth.

(Flash flooding from the same storm also uncovered the bison bones that George McJunkin found in Dead Horse Arroyo, which later became known as the Folsom site.

According to the United States Census Bureau, the village has a total area of 0.5 sq mi (1.3 km2), all land.

Most of the valley is rich grassland, with a pinyon pine and juniper forest found on slopes and in rocky areas.

Large ranches and cattle grazing are typical of the area, although some irrigated agriculture is found downstream from Folsom.

Hunting for deer, bear, elk, pronghorn, and turkey is popular on local ranches.

[10] Capulin Volcano National Monument is located 7 mi (11 km) south of Folsom.

[11] The Cimarron River, only a small stream a few feet wide here, is stocked with trout annually.

[12] Eight miles (13 km) west of the city below Johnson Mesa is Wild Horse Arroyo, where in 1908, a cowboy named George McJunkin discovered the bones of an extinct bison.

This archaeological find later proved ancient man had been in the Americas at least 10,000 years, far longer than earlier believed.

Most community life centers around the Folsom Museum, established in 1966 in the Doherty Mercantile building.