The Jicarilla Apache tribe once lived in the area. They were followed by Spanish settlers, who introduced farming, horses and Christianity.
Originally called Santa Clara,it was renamed in 1859 in recognition of the covered wagon shaped rock formation that backdrops the town.
The formation had long been a landmark on the Santa Fe Trail, identifying the point where the Cimarron Cutoff rejoined the main branch of the Trail. At Wagon Mound, travelers could cross from the Cimarron Cutoff to Fort Union.
Today, Wagon Mound is still a farming and ranching community. Every September, the village holds an annual celebration with a parade and street carnival - which dates back to when the area was prominent for its pinto bean harvest. The first "Bean Day" was held in 1910. Beans, however are no longer produced in the area.