It is located immediately north of Alamogordo and lies in the eastern edge of the Tularosa Basin and on the western flank of the Sacramento Mountains.

Native Americans lived in the area for thousands of years prior to the arrival of the Spanish in the late 16th Century.

The Mescalero Apache homelands covered an area of south-central New Mexico including the Sacramento Mountains and the Tularosa Basin.

By some accounts, it was founded by Franciscan friars as early as the 18th Century and called Nuestra Señora De La Luz (Our Lady of the Light).

It is well documented that a large group of Hispanic settlers came to the area around 1864 leaving villages along the Rio Grande in the vicinity of present-day Socorro, New Mexico, after devastating floods had occurred.

Charles B. Eddy and partners constructed a branch line from El Paso northward to exploit the timber resources of the Sacramento Mountains and coal deposits further north near present-day White Oaks, New Mexico.

Eddy then constructed a branch into the Sacramento Mountains that went through La Luz and climbed to approximately 9,000 feet within the span of a few miles.

The Village of Cloudcroft was established in the Sacramento Mountains and offered residents of El Paso an escape from the heat during the summer.

Eddy's partner and lawyer for the railroad, William Ashton Hawkins, established a farm and large home which still stands in La Luz.

The pottery works supplied contractors nationwide at a time when the Spanish Colonial Revival architectural style was at its height.

La Luz itself is largely residential and agricultural in land use but a small market is located on the state maintained road that connects the village to Highway 70.

La Luz has long been known for the many fruits that are grown in the area including figs, apricots, plums and peaches.