Situated in a traditional mining region, the town is part of the largest industrial copper-extraction area in Poland, with a copper-processing plant operating nearby.

Nearby Polkowice Dolne is the site of a former State Agricultural Farm (PGR) and, since 1998, of a Volkswagen diesel engine plant, another major employer in the region.

According to legend, The Silesian duke Bolesław I the Tall (1127–1201) had a hunting lodge erected near the later town, later called Bolkewice or, adjusted to the German pronunciation, Polkovicz (1333).

Between 1871 and 1945 the town was part of Germany and was renamed Heerwegen in 1937 by German Nazi authorities during a campaign of erasing placenames of Polish origin.

During World War II, a German forced labour subcamp of the prison in Jawor was operated in the present-day district of Polkowice Dolne.