Set in the heart of the Shoshone Reclamation Project, Powell was named for Major John Wesley Powell, the famed proponent of western land reclamation and early explorer of the Rocky Mountain West. Although Powell never visited the Shoshone Irrigation Project in Park County, this important trading center was named in his honor.

The Heart Mountain Relocation Center, west of town, was Wyoming's third largest city when 11,000 Americans of Japanese descent were interned there during World War II.