Jefferson County was created on Dec. 12, 1914, out of territory that was once part of Crook County. The county was named after Mount Jefferson, the second highest peak in Oregon with an elevation of 10,497 feet, which marks the county's western skyline. The county is bounded on the north by Wasco County, on the east by Wheeler and Crook Counties, on the south by Deschutes County, and on the west by Linn and Marion Counties. The county encompasses 1791 square miles. 

Madras, named after the city in India, was incorporated in 1911 and serves as the county seat.

The first county courthouse was constructed in 1917 as the Madras City Hall. A formal agreement in 1919 provided for shared use of the building by city government and county offices and court. A new county courthouse was built in 1961. That courthouse was demolished and replaced in 2016. County government is administered by a three-member board of commissioners. 

The county's population at its first federal census in 1920 was 3,211. The 2016 population of 22,790 represented a 4.9% increase from 2010. 

Principal industries are agriculture, forest products and recreation. The fertile North Unit Irrigation District in the central part of the county produces seed, potatoes, hay and mint. The eastern part of the county has dry wheat farming and grazing land for cattle, and the western part is timber country. Kah-Nee-Ta Vacation Resort and Indian Head Casino owned by the Confederated Tribes of the Warm Springs Reservation, provide jobs in the area. The reservation is located on portions of land in four counties including 236,082 acres in the northwest corner of Jefferson County. 

The county owes much of its agricultural prosperity to the arrival of the railroad in 1911 and the development of irrigation projects in the late 1930s. The railroad, linking Madras with the Columbia River, was completed after constant feuds and battles between two lines working opposite sides of the Deschutes River.