Spanish explorer Juan de Oñate reached the Rio Grande at or near the site of present San Elizario on April 20, 1598, and ten days later took formal possession of New Mexico and all adjacent territory in the name of the Spanish king. A presidio was established in 1683 near El Paso del Norte (present-day Cd. Juarez, Chihuahua). It was named San Elcear, a French saint who is the patron of soldiers. Presidio Chapel San Elceario was established as a military garrison to protect the Camino Real and the missions and settlements along its trail. But, like the two other missions, this Spanish fort was moved several times. The Presidio was moved in 1789 by Spanish military authorities from present-day Porvenir, Chihuahua, 37 miles upstream to the site of today's San Elizario Plaza. The town of San Elizario uses a corrupted version of the original name, while the Chapel continues to bear the original name. For over half a century soldiers defended the river settlements against Apache attacks.

San Elizario was second only to El Paso del Norte among local towns for most of the nineteenth century. Merchant caravans passed through the town before the opening of the Santa Fe Trail. In 1821, after the Mexican War of Independence from Spain, San Elizario became part of the state of Chihuahua. Mexican troops still occupied the old presidio in 1835, and it served as a nucleus for a town. In 1830-31 the unpredictable Rio Grande changed course, placing San Elizario and its neighboring communities on La Isla, an island between the old and new channels of the river. In 1848 when the Treaty of Guadalupe Hidalgo established "the deepest channel" of the Rio Grande as the boundary between Texas and Mexico, San Elizario became part of Texas. The town lay on the Lower El Paso or Military Road from Corpus Christi to California, and hundreds of Forty-Niners passed through in the late 1840s. Many visitors admired the local peaches, plums, and wheat, and the wine produced from San Elizario. Companies of the Third Infantry under Jefferson Van Horne were stationed there from 1849 to 1852.

In 1850, when El Paso County was officially organized, San Elizario was selected the county seat. Except for brief periods in 1854 and 1866, it remained the county seat until 1873. During the Civil War troops of the California Column occupied the old presidio, but after the war it was finally abandoned for good.

After 1873 San Elizario began to decline in importance. It was also witness to the 1876 jailbreak rescue of Melquiades Segura by his partner-in-crime, Billy the Kid. The jail in San Elizario is even now referred to as the Billy the Kid Jail. Perhaps the most notorious episode in the history of the town was the 1877 Salt War of San Elizario, in which several men died in a dispute over rights to the salt deposits just west of the Guadalupe Mountains, ninety miles to the east. After the salt war many residents of San Elizario fled across the Rio Grande to escape punishment, and in 1881 the town was bypassed by the railroad in favor of El Paso.