The first settlers of Stephenville were Acadian families from Cape Breton who migrated there in 1848. The first settlers established a farming and fishing community from premises below Indian Head, southeast of the present town. By the turn of the century, fishing had taken over from agriculture as the major occupation.

Stephenville was already known as Newfoundland's "Acadian Village," being almost exclusively Roman Catholic and largely French speaking up until World War II. In the 1901 census, Stephenville had 643 residents, only nine of whom were Protestant. Lumbering became one of the main sources of employment after the opening of the Corner Brook paper mill in 1925.

The construction of Harmon Air Force Base would change all that. Stephenville was inside the largest area specified in the 1940 lend-lease agreement between the United States and Great Britain: 1859 acres of land in the northeast end of St. George's Bay. Harmon Field became the largest U.S. air force base outside the continental U.S. and a major refueling stop for aircraft en route to Europe.

Construction began in 1941, with the creation of a support camp, where more than 1500 men from the surrounding area soon found work as tinsmiths, sheet metal workers, construction laborers, carpenters, etc... The population increased to over 7000 virtually overnight. The scope of the impact upon Stephenville was immense.

With the end of the age of supersonic bombers, however, came the end of Harmon Field. The closing of the base in 1966 was a blow to the economy, but the town was left with over one hundred million dollars worth of military buildings and a world-class airport.