Coal was first discovered here in 1886 by brothers William W. and Harvey Johnson. The brothers founded the Johnson Coal Company and began mining that December. A large number of workers came from other countries and spoke little English, allowing the Company to repress workers, eventually leading to a strike. As a result, the Johnson Coal Company was bought out in 1888 by founders of the Texas and Pacific Coal Company, including its president Colonel Robert Dickey Hunter and H.K. Thurber, for whom the Company's new townsite would be named.

Colonel Hunter ended the strike by fencing off a portion of the property and developing the Thurber townsite, complete with schools, churches, saloons, stores, houses, an opera house, hotel, ice and electric plant, and library. Miners soon moved their families to the fenced community - which did not allow permit Union organizers. In 1897 Thurber also gained a brick plant; Colonel Hunter was a partner in this operation as well.

Following Colonel Hunter's retirement in 1899, William K. Gordon took over the operation. For a few years, Thurber remained a company-dominated town but in September 1903 over 1600 members were inducted to the United Mine Workers Union.

By the late 1910s, locomotives that relied on coal were switching to burn oil instead, beginning Thurber's quick decline. The Company's discovery of oil near Ranger prompted a name change to the Texas Pacific Coal & Oil Company, with coal mining ending in the 1920s. Thurber's over 10,000 residents began to move onto other ventures. The brick plant ceased operation in 1930, followed by the commissary store in 1935 and post office in 1936. Homes and businesses were dismantled, and Thurber was practically a ghost town.

Today, less than 50 people live in Thurber. The Texas Pacific Coal & Oil Company has since changed names once again, this time to Texas Pacific Oil Company. The Company still owns the bituminous coal deposit (the only one in Texas), and an estimated 127,000,000 tons of coal still remains beneath the surface.