Though the Texas & Pacific Railway was constructed through the area in 1881, Barstow wasn't laid out for another ten years. The town was founded by George E. Barstow, a land promoter and irrigation expert from Rhode Island. In 1892, Mr. Barstow established the Barstow Improvement Company to promote land sales with irrigation from the Pecos River; a dam and canals were built and potential settlers brought in by train. That same year, Barstow was chosen as the seat of newly-created Ward County. The following year, a three-story red sandstone courthouse was erected.

By 1900, Barstow's population exceeded 1000. Local farms grew grapes, peaches, pears, and melons. Barstow's grapes even won a Silver Medal at the 1904 World's Fair. Unfortunately, that same year the dam on the swollen Pecos River burst. Floodwaters inundated Barstow and ruined many farms, raising the soil's salinity. Droughts followed in 1907 and 1910, with farming coming to an end in 1918.

By 1925, Barstow's population had dropped to less than 500. By 1930, oil was discovered in Winkler County and eastern Ward County and in 1938 Barstow lost the county seat to Monahans. The courthouse was razed in the 1950s.