[4] Libby suffered from the area's contamination from nearby vermiculite mines contaminated with particularly fragile asbestos, leading to the town's inclusion in the United States Environmental Protection Agency's National Priorities List status in 2002 and Public Health Emergency event in 2009.

In 1892, with the arrival of the Great Northern Railway, the town moved downstream and the name was shortened from Libbysville to Libby.

Libby's economy had been largely supported in the past by the use of natural resources, such as logging and mining.

Owned by a nonprofit foundation, the Ski Area served around 4,600 visits per year in 2017/2018 and relies on volunteer hours and donations for most of its services.

[24] In the mid-1980s, a major ski resort was proposed for Great Northern Mountain, twenty miles (30 km) south of Libby.

In 2008, a report found that wood pellet waste from nearby lumber mills could be used to produce several megawatts of electricity.

Stoltze Land & Lumber Company in 2013 with a twenty year contract, leading to the construction of "a biomass-fueled electric generation facility at their plant near Columbia Falls.

In 1963 W. R. Grace and Company bought the local mine, by which time it was producing 80% of the vermiculite in the world.

[32] Nearly 10% of the population died from asbestos contamination, and the federal government later charged company officials for complicity.

Fred Festa, chairman, president and CEO said in a statement, "the company worked hard to keep the operations in compliance with the laws and standards of the day.

On June 17, 2009, the EPA declared its first public health emergency, which covered Libby and nearby Troy.

[35] The 2010 Patient Protection and Affordable Care Act includes a provision which provided Medicare coverage to individuals of such public health emergencies.

[36][37] By 2015, the U.S. Environmental Protection Agency (EPA) was concluding the removal of asbestos-contaminated soils and other suspect materials in and near Libby[35] and had spent $425 million in Superfund money on cleanup.

"[41] The remaining contamination is limited to the forests and property in or near the former mine, with cleanup plans pending and with controls for higher exposures during wildfire fighting.

[42][43] The same year, the local Center for Asbestos began offering testing for autoimmune markers for pleural disease, which would act as an early screen for at-risk patients.

Site reviews are held every five years, and as of 2020, several controls are in place to prevent contact with and consumption of contaminated materials.

[59] The library now provides programming for children and adults and online services such as mobile data hotspots for borrowing.

[60] Flathead Valley Community College offers courses through its Lincoln County Campus in Libby.

[61] This campus operates the Glacier Bank Adult Basic Education Learning Center "where students can take free classes in preparation for their GED exams.

The nearby Kootenai Falls and the Swinging Bridge were featured in the 1994 movie The River Wild.