During the 1944–1991 Soviet occupation, large numbers of immigrant workers from Russia and other parts of the former USSR were brought in to populate the rapidly growing city.

Local residents were aware of oil shale's flammable capability in ancient times, but its industrial extraction in Estonia began only in the 20th century.

In 1924 the oil shale processing factory was built near Kohtla railway station, and the nearby settlement, named Kohtla-Järve, started to grow.

After the war, the next occupier of Estonia, the Soviet Union, required constantly increasing quantities of oil shale for its industries and extraction greatly expanded.

Thus, Kohtla-Järve greatly expanded, becoming a city with a unique layout, as its parts remained scattered among woods, agricultural areas and oil shale mines.

After the end of the Soviet Union occupation, Estonia regained independence in August 1991, and thereafter the number of city districts decreased, as Jõhvi, Kiviõli and Püssi became officially separate towns.

The volume of oil shale extraction and processing decreased dramatically during the 1990s, and many Kohtla-Järve citizens moved to Tallinn or Russia, due to high unemployment in Ida-Viru County.

It is the headquarters of Viru Keemia Grupp, an Estonian holding group of oil shale industry, power generation, and public utility companies.