The town of Tombstone was founded in 1879, taking its name from the mining claim, and soon became a boomtown. Fueled by mineral wealth, Tombstone was a city of 1000 by the beginning of 1881, and within another year Tombstone had become the seat of a new county (Cochise County) with a population between 5,000 and 15,000, and services including refrigeration (with ice cream and later even ice skating), running water, telegraph and limited telephone service.

Capitalists and businessmen moved in from the Eastern U.S. Mining was carried out by immigrants from Cornwall and Europe. An extensive service industry (laundry, construction, restaurants, fine hotels, etc.) was provided by Chinese and other immigrants.

Tombstone nearly became a ghost town after the decline of silver mining there, saved for many years only by its status as the Cochise County seat. Even the county seat was later moved by popular vote to nearby Bisbee in 1929. However, the classic Cochise County Courthouse and adjacent gallows yard in Tombstone is preserved as a museum.

Tombstone is home to perhaps the most famous graveyard of the Old West, Boot Hill. Buried at the site are various victims of violence and disease in Tombstone's early years, including those from the O.K. Corral. Boot Hill (also known as the old city cemetery) was also the destination for bad-men and those lynched or legally hanged in Tombstone. Admission to this historic site is free and donations are accepted.

The lot in which the historic gunfight at the O.K. Corral occurred in 1881 started is also preserved, but this has been walled off, and admission is charged. However, since much of this street fight occurred in Tombstone's Fremont Street (modern Highway 80), much of this site is also viewable without admission charge.

According to The Guinness Book Of World Records, the world's largest rosebush was planted in Tombstone in 1885 and still flourishes today in the city's sunny climate. This Lady Banksia rose now covers 8,000 square feet of the roof on an inn, and has a 12-foot circumference trunk.

Currently, tourism and western memorabilia are the main commercial enterprises; a July 2005 CNN article notes that Tombstone receives approximately 450,000 tourist visitors each year. This is about 300 tourists/year for each permanent resident. In contrast to its heyday, when it featured saloons open 24 hours and numerous houses of prostitution, Tombstone is now a staid community with few businesses open late.