The southern half of what is now Indiana County came under European control with John Penn's Land Purchase from the Six Nations of 1768, and the northern half followed with the purchase in 1784. The county was established in 1803, but the first settlers traveled over the Kittanning Trail through the middle of the county and along the Conemaugh River from the south c. 1769. Most of them were Scots-Irish Presbyterians, moving into what was then old Westmoreland or Lycoming County from Cumberland Valley.

Although the town of Indiana was the county seat, Blairsville was the county's largest town in the first half of the nineteenth century. It was a principal stop on the Pennsylvania Canal and, later, the Pennsylvania Railroad. Rivers and creeks were early transportation routes, but ice jams stalled traffic on them for many months of the year. After the Pennsylvania Canal was completed through the southern part of the county in 1829, large-scale boat-building and regular packet services developed. Saltsburg, another canal town at the southern end of the county, was known for its salt mining, a profitable industry in the nineteenth century. In 1852, the Pennsylvania Railroad supplanted the canal, and by 1860, the canal was abandoned. Blairsville remained the busiest city until 1864, when the Indiana Branch Railroad opened to the county seat. The former Buffalo, Rochester and Pittsburgh Railroad (BR&PRR) station (1904; 1125 Philadelphia Street) is now a restaurant.

Conemaugh Generating Station No. 2, Power Plant Road (PA 2008) near Huff, West Wheatfield Township, Indiana County. This plant, which opened in 1970, uses over four million tons of coal each year on its 1,750-acre site along the Conemaugh River.

After the Civil War, networks of small roads facilitated the movement of produce and coal to the larger market towns of Blairsville and Indiana. Covered bridges built between 1870 and 1910 spanned small creeks to make this possible. Indiana County has three Ithiel Town truss (patented in 1820) covered bridges, an unusual number considering there are only eighteen remaining in the commonwealth, thirteen of them in Bucks County in eastern Pennsylvania. All three are easily accessible from the county seat and each other: Harmon's Bridge (1910) and Trusal Bridge (1870), 2 miles and 3.3 miles northeast of Creekside, and Thomas Ford Bridge (1879), 3 miles southwest of Creekside. A Town truss uses timber lattice pinned with wooden pegs at the intersections for ease of construction. The fourth extant covered bridge here in Indiana County (
IN8), even rarer, is one of only four Howe truss types remaining in the state. Modern highways, notably U.S. 119 that runs centrally from north to south and the newly expanded U.S. 422 that stretches from east to west, have stimulated growth in the town of Indiana.

Before 1850, the main industries were agriculture (corn and dairy), salt refining, iron smelting, coal mining, the distillation of alcohol, hide tanning, and lumbering. Today, most Indiana County residents are employed on farms, in education (Indiana University of Pennsylvania,
IN6), in power plants, or in the service industries. Tree farming began here in 1918, and now Indiana County leads the commonwealth in their harvesting. However, the county has lost one-third of its manufacturing base since 1990, and mining employment has dropped by half. In the late 1960s, nine power companies from four eastern states and the District of Columbia pooled their resources to construct a billion dollar power station at four separate facilities, three in Indiana and one in Westmoreland County. The Indiana County plants at Homer City, Huff, and Shelocta have awesome coal-burning and electrical-generating capacities, over 1,000-foot-tall smokestacks, and 370-foot cooling towers. Together, the stations employ 1,100 and supply over 21 million people with electricity.