The town was founded in 1911, and the post office was built a year later. In 1921, this still-tiny community based around the ranching industry was designated the county seat. Rankin was served by the Kansas City, Mexico and Orient Railway.
The discovery of the Yates Oil Field in adjacent Pecos County in 1926 converted Rankin into a boom town. Since Rankin was the nearest settlement on a rail line, it became the center for the oil-services industry for the nearby oil fields. During the Great Depression, the population declined as the price of oil fell, and as workers moved away to work in newly discovered fields in East Texas and elsewhere, but a secondary boom occurred in the 1940s with the discovery of the nearby Benedum Oil Field. A hospital, three new schools, and a library date from this period. The population has gradually fallen since its secondary peak of 1,278 in 1980.
In 1990, the Confederate Air Force (later Commemorative Air Force) filmed a famous "Don't Mess with Texas" advertising campaign near Rankin using the B-17G Sentimental Journey of Airbase Arizona in Mesa, Arizona.