The city was named in honor of John W. Gunnison, a United States Army officer who surveyed for the transcontinental railroad in 1853.

[4] In the summer of 2007, over 24,000 US gallons (91,000 L)[5] of gasoline leaked from a storage tank beneath the Top Stop gas station, located on the corner of South Main and East Center and owned by Wind River Petroleum.

The gasoline leaked throughout the soil beneath South Main Street and eventually throughout the southwest side of town, contaminating businesses and homes.

On August 10, 2007, local and state officials ordered the temporary evacuation of an entire Main Street block, heavily populated with businesses, because of the fumes from the gasoline leak.

Gunnison City, along with several businesses and residents, filed suit against Wind River Petroleum over the handling of the gas leak.

The startling ratio of women to men is due to the presence of the Central Utah Correctional Facility, located one half mile northeast of downtown Gunnison.