In 1888, the Hudson Bay Company began a cattle race four kilometers to the southeast on the banks of the Spirit River (from "Chepi Sepe" - Cree for Ghost or Spirit River as recorded in the Fort Dunvegan Journal as early as 1854) to serve traders at Fort Dunvegan. In 1907 the Spirit River Settlement was surveyed using the old river lot system. In 1915, to the northwest, on Section 22, the ED & BC RR subdivided a townsite called the "Spirit River Station". The residents and storekeepers at the old settlement then moved, creating a village in 1916. The name was shortened in 1920 and the village became a town in 1950.

The Town of Spirit River is a thriving community in northwestern Alberta, Canada. Its local economy is supported by agriculture as well as the oil and gas industry. The official 2001 Census lists the Town of Spirit River's population at 1,100 with 496 dwellings. Bordering two large counties, the Town of Spirit River is also the major trading area for a large rural population estimated at 10,000.