Centuries ago, the valley encompassing Crested Butte and Mt. Crested Butte was used as a summer residence by Ute Native Americans. This area, located at the northern end of the Gunnison Valley, was and still is surrounded by public lands and forested mountains. Eventually, the Utes were displaced when white explorers first entered the area (mostly beaver trappers, followed by surveyors). Captain John Gunnison, after whom Gunnison County is named, was one of the early explorers to enter the valley.

In the 1860's and 1870's coal and silver mines began to open in the surrounding area and many little mining towns formed. However, when silver mining hit on hard times, many of these towns failed. Crested Butte, as the supplier to smaller villages, survived this downturn of the mines. When the coal mines closed, the town began to shrink, and eventually the local high school was closed with students traveling to Gunnison to go to school. The town began its revival in the mid 1960's solely due to the vision extended by the founders of the ski area which was built on Crested Butte Mountain during that time.

In 1993 the Crested Butte Academy opened in Crested Butte, bringing a private high school into town. In 1997, the Crested Butte Community School was opened, and Crested Butte finally had a public high school again.  In 2004, Crested Butte Mountain Resort was sold to Tim and Dianne Mueller of Okemo Mountain Resort in Ludlow, VT.

In addition to winter activities, many consider Crested Butte the place where mountain biking was born.  Furthermore, fishing experts consider the streams in and around the valley to be amongst the very best in the entire world.  Lastly, the Colorado state legislature has designated Crested Butte the wildflower capital of Colorado. Now, as the "Muller Momentum" moves Mt. Crested Butte forward, the twin villages will grow up to their billing as "the last great Colorado Ski Town".