The Dawes Severalty Act of 1887 allowed the government to subdivide the Yakama Indian Reservation tribal communal landholdings into allotments for Native American heads of families and individuals.

In the early 1900s, McCredy and George Rankin established the Wapato Development Company and laid out the town site.

In response to persistent confusion with nearby Fort Simcoe, the town changed its name to Wapato in 1903.

The Yakima Buddhist Bussei Kaikan (1936–1941), on West 2nd Street, was an architecturally noteworthy building built by members of the congregation.

[6] A mob including police attacked dozens of African Americans at a railroad camp in Wapato on July 9, 1938.

[8] Executive Order 9066 forced the Japanese to evacuate from Wapato in 1942 and many residents were sent to internment camps.

At the end of the war, a labor shortage created a void readily filled by Hispanic migrant workers, and the Bracero Program (a guest-worker program agreed to by the US and Mexico during World War II).

Through the 1970s and into 1990, Wapato produced some of the largest volume potato and apple crops, as tonnage per acre.

[citation needed] Today, Wapato boasts one of the most Hispanic populations in Washington State (76% in the 2000 census).

In recent times both Anglo and Hispanic residents have described Wapato as a "Mexican Town".

"[11] According to the United States Census Bureau, the city has a total area of 1.17 square miles (3.03 km2), all land.

Hispanic immigrants arrived for agricultural jobs and the small town lifestyle.