Their importance was somewhat increased in the 1930s, as Olenya became a junction for the railway branch to the newly built town of Monchegorsk some 30 kilometers (19 mi) to the southwest.

In 1949, work started on the iron ore strip mines and ore-processing facilities a few kilometers to the west of the Olenya station.

At the same time, construction of a company town, originally also named Olenya, started between the rail station and the mines, to the west of the railway.

By the March 27, 1957 Decree of the Presidium of the Supreme Soviet of the Russian SFSR, the work settlement of Olenya was granted the status of a town under district jurisdiction, subordinated to Monchegorsk, and given its present name.

[citation needed] Olenegorsk was elevated in status to that of a town under oblast jurisdiction by the August 10, 1981 Presidium of the Supreme Soviet of the RSFSR Decree, and several inhabited localities previously subordinated to Monchegorsk were transferred to Olenegorsk by the August 26, 1981 Decision of the Murmansk Oblast Executive Committee.