Cave Creek was named for the small stream that rises in the hills to the northeast and flows southwesterly for 25 miles. The town is rich in archaeological finds. Many petroglyphs and pictographs can be found in the surrounding desert. Dozens of prehistoric sites have been discovered, many of which remain undisturbed to this day.

Mining became a focal point in central Arizona history in 1863, but it wasn't until 1874 that William Rowe struck gold in Gold Hill northeast of Cave Creek and established the Cave Creek Mistress Mine. A wagon road was built through the area in 1865 to help make the travels of those heading west in search of gold easier.

Around 1877, the site was known as Cave Creek Station, and people arrived to the area with the intention of mining, ranching, or farming. In 1928, the land south of Black Mountain (the heart of modern Cave Creek) was opened for homesteading. This spurred a tremendous influx of people to the area. In 1952, Scottsdale Road was extended to Cave Creek Road, and more people chose Cave Creek as their home. Cave Creek was finally incorporated in 1986.