It forms a solid solution series with scheelite (calcium tungstate, CaWO4).

[3] Powellite was first described by William Harlow Melville in 1891 for an occurrence in the Peacock Mine, Adams County, Idaho, and named for American explorer and geologist, John Wesley Powell (1834–1902).

[3] It occurs in hydrothermal ore deposits of molybdenum within the near-surface oxidized zones.

It also appears as a rare mineral phase in pegmatite, tactite and basalt.

Minerals found in association with powellite include molybdenite, ferrimolybdite, stilbite, laumontite and apophyllite.