Deschutes County was created from the western portion of Crook County on December 13, 1916. It was named for the Deschutes River which flows through the county. Early fur traders had called the river Riviere des Chutes which means "River of the Falls." The county encompasses 3,055 square miles and is located in the central portion of the state. Geographically, the county includes portions of the Cascade Mountains and the central high desert plateau. It is bounded by Jefferson County to the north, Crook County to the east, Klamath and Lake Counties to the south, and Lane and Linn Counties to the west.

The county seat is located in the city of Bend which was incorporated in 1905. The name Bend was derived from "Farewell Bend," the designation used by early pioneers to refer to the location along the Deschutes River where the town eventually was platted. County offices were first located in two rooms of the O'Kane Building and later moved into an office building constructed by the Deschutes County Investment Company. The county court met there from 1917 to 1935. A county jail was completed 1918. In 1935 the county court decided to purchase the old brick high school to serve as the courthouse. In 1937 the courthouse and most of the early county records were destroyed by fire. The greatest loss of records was in the county clerk's office. The state fire marshal investigated the cause of the fire, but arson was never proved. A new courthouse was constructed in 1940 and an addition was built in 1978.

The first meeting to organize county government was held in the O'Kane Building. Appointments were made for the positions of district attorney, county judge, two commissioners, clerk, assessor, treasurer, surveyor, superintendent of schools, coroner, physician, and sheriff. The county judge position, which had juvenile jurisdiction, was abolished in 1971 and replaced by a third county commissioner. In that year the county court administrative system was replaced by the three member board of commissioners.

Principal industries in the county are lumber, tourism, and agriculture, chiefly cattle and potatoes. The major destination resort, Inn of the Seventh Mountain, and the resort communities of Black Butte and Sunriver, were developed during the 1970s. The Mount Bachelor ski area and High Desert Museum add to the tourism-based economy in the county as well.

The first county census taken in 1920 enumerated a population of 9,622 inhabitants. Deschutes County has experienced the most rapid growth of any county of the state in recent years. The 2000 population of 115,367 was a 53.91% increase over 1990.