The first homesteader in the area was Cabot Yerxa in the 1890s. His large adobe is now one of the oldest adobe structures in Riverside County, and houses Cabot's Old Indian Pueblo Museum, a state historical site after his death in 1947.
The town was founded by L. W. Coffee on July 12, 1941. The original town site was centered on the intersection of Palm Drive and Pierson Blvd and was only a square mile in area. He gave the name Desert Hot Springs for the area's natural hot springs caused by seismic activity.
Desert Hot Springs became a tourist destination in the 1950s through its small spa hotels or boutique hotels. The city's seclusion appealed to move-in urban "escapees".
Realtors arrived to speculate real estate appraisal of thousands of vacant lots, but the streets are laid out over a six square mile area. Over time, some homes are bought by sun-seeking retirees and the area incorporated into a city in 1963, with only 1,000 residents.
Desert Hot Springs experienced periods of dizzying growth in the 1980s and 1990s when most of the vacant lots were filled with new houses and duplex apartments. The city's population doubled in the 1980s and increased by 5,000 in the 2000 census.
In 1993, a 3-star hotel, Mirage Springs Hotel Resort opened in DHS. Despite good reviews and provided much needed financial revenue to DHS, Mirage Springs closed its doors in 1998. Another hotel has since occupied the site.
A new high school opened in 1999, two new public parks and several country clubs either opened or proposed, and a hotel resort near the 40-year old Mission Lakes golf club is under construction.
