Celilo Falls on the Columbia River served as a gathering place and major trading center for the local Native Americans, including the Wasco, Paiute, and Warm Springs tribes, for thousands of years.

The construction of the Barlow Road over the Cascade Range in 1845, and the Donation Land Claim Act of 1850 encouraged families to settle in the area.

At the time of its creation, it was the largest county in the United States, consisting of 130,000 square miles (340,000 km2) that stretched clear to the Rocky Mountains.

Wasco County attracted international attention in the 1980s, when Bhagwan Shree Rajneesh established the Rajneeshpuram movement at a marginal ranch originally called "The Big Muddy".

Disagreements with the county government and other residents over zoning rules and building codes escalated, while his followers, known as Rajneeshees, settled en bloc in Antelope, Oregon and were able to elect a majority of the town councillors.

When the Rajneeshees subsequently recruited homeless people from across the United States to settle at Rajneeshpuram, it was widely seen as an attempt to use the ballot box to seize control of the county.

An intentional outbreak of salmonella in salad bars at ten restaurants in The Dalles in 1984 was traced to the acts of Rajneeshees.

Rajneesh was arrested as he was fleeing the U.S. in 1985 and he was subsequently indicted along with seven followers for immigration crimes by a federal grand jury.

A separate grand jury in Wasco County charged three Rajneeshees of attempted murder, while Rajneesh entered an Alford plea and was given a suspended sentence on condition that he leave the country.

It is owned and operated by Young Life Ministries, a Christian organization providing camp services for youth.

The Northern Oregon Regional Corrections Facility (Norcor), a short-term jail, serves Wasco, Gilliam, Hood River, and Sherman counties.

The county's economy is based upon agriculture (orchards, wheat farming, livestock ranching), lumber, manufacturing, electric power, transportation, and tourism.