Abernathy, on Interstate Highway 27 and U.S. Highway 87 eighteen miles north of Lubbock in Hale County, was founded in 1909 when the Santa Fe Railroad built from Plainview to Lubbock. It was apparently named for M. G. Abernathy, who along with J. C. Roberds and Marvin C. Overton formed the South Plains Investment Company to establish and promote the town. Many of the buildings from Bartonsite, a small community seven miles to the northwest, were moved to Abernathy, which gained a post office in 1910. By 1914 the town had a population estimated at 300, four churches, several stores, and a bank.
The community was incorporated in 1924 and by 1926, when it had forty-five businesses and about 1,500 people, was known as a cotton and grain center. The businesses included a flour mill, which opened during the early 1920s and operated until its destruction by fire in 1934 or 1935. In 1929 a cheese factory began operation. It survived until 1951 and at its height produced 1,800 pounds of cheese daily. The community acquired electricity in 1929–30, a public water system in 1934, and a sewer system in 1949. Population figures fell to around 850 in 1930 and remained relatively stable for the next two decades. The number of businesses ranged between thirty and forty from 1933 to 1946. The discovery of oil near Abernathy in 1946 and 1947 caused a boom, resulting in a rise in both the number of businesses (sixty-five) and the population (1,962) by the early 1950s.
With a variety of businesses offering goods and services, the town has remained an agribusiness and trading center since that time. However, after a high of 114 businesses in 1967, the number steadily declined to a low of forty-five in 1985. By 2000 the number of businesses again reached 114. The population was 2,491 in 1960, 2,625 in 1970, and 2,904 in 1980, when 699 of the town's residents lived in Lubbock County. In 1990 the population was 2,720 and in 2000 grew to 2,839.