In 1840 William Newton Byers, founder of the Rocky Mountain News, was the first European American to document the springs.

In 1863 the town site was bought by Byers in a backroom deal with a Minnesota Sioux woman[citation needed] despite a treaty naming the Ute tribe as the lawful owners[citation needed], who unsuccessfully sued Byers, while Byers and territorial governors William Gilpin and John Evans launched a "The Utes Must Go" campaign with the help of the U.S. Cavalry[citation needed].

Wishing to create a world-famous spa and resort ("the American Switzerland"), Byers changed the name and surveyed, platted, and named the streets, attracting famous visitors including Zane Grey and John Wesley Powell.

The Byers Canyon Shooting Range west of town is part of the Colorado Parks and Wildlife Hot Sulphur Springs State Wildlife Area providing a winter foraging area for big game animals.

[10] According to the United States Census Bureau, the town has a total area of 0.77 square miles (2.0 km2), all of it land.

[11] This climate type is dominated by the winter season, a long, cold period with short, clear days, relatively little precipitation mostly in the form of snow, and low humidity.

In more recent years a resort has been built at the hot springs that offers several soaking pools and tubs with temperatures ranging from 98 °F to 112 °F.

The mineral content of the water consists of calcium (15ppm), chloride (145ppm), fluoride (11ppm), lithium (1.3ppm), magnesium (3.2ppm), potassium (24ppm), sodium (435ppm), sulfate (145ppm).