The first European settlers arrived in Drayton Valley about 1907. They practised marginal mixed farming, lumbering and trapping. The post office was named after Drayton, England, which was the hometown of the first postmaster’s wife. In 1953, huge reserves of oil were discovered in the Pembina oil field. Drayton Valley, because of its proximity, was chosen as the centre of the oil field’s development.
The town is located on high land overlooking the North Saskatchewan River as planned as a model town by the provincial government, but growth was so rapid that severe crowding resulted. In 1953, the population grew from 75 to over 3,000. In 1954, the Drayton Valley Townsite Act was passed to control land sales. Today, the town has well-established neighbourhoods, parks, a walkway system and a sports complex. It was incorporated as a village in 1955 and as a new town in 1956. In 1957 it was granted full autonomy.