Founded in June 1908 when the Oregon Short Line Railroad was completed, the town's name changed several times until West Yellowstone was settled upon in 1920.

[6] According to the United States Census Bureau, the town has a total area of 0.80 square miles (2.07 km2), all land.

[7] At 6,660 feet (2,030 m) above sea level and nearly halfway between the equator and the North Pole, West Yellowstone experiences a subarctic climate (Köppen climate classification Dfc), with cold — sometimes bitterly cold — winters and brief but generally warm summers.

At the peak of the snowpack, which typically occurs in early March, there is 3.5 – 4 feet of snow on the ground.

[8] West Yellowstone holds the all-time lowest recorded temperature for any residential community in the contiguous United States at −66 °F (−54 °C), although a lower temperature was once recorded at Rogers Pass, Montana, at −70 °F (−57 °C).

As of the census[16][clarification needed] of 2000, there were 1,177 people, 518 households, and 289 families residing in the town.

Because of its proximity to Yellowstone National Park, the town receives a large amount of tourism, especially from China.

To cater to these tourists, the town has commercial signage in Mandarin as well as six Chinese restaurants.

KWYS (AM),[22] broadcasting at 920 kHz and locally owned by Radio West, LLC, plays an oldies format.

The FM station KEZQ[23] plays soft adult contemporary music.

The D Parkway road roughly separates the town into residential and commercial areas.

The Union Pacific Railroad historically operated the Butte Special (29/30), which linked with a coordinated train, the Yellowstone Special (35/36), which ran from Pocatello, Idaho to West Yellowstone.