It is thought that the town grew up around St Mary's Augustinian Friary (popularly referred to as "the Abbey"), which was founded in 1348, according to local tradition. The town and the surrounding hinterland is steeped in history and contains an extraordinary concentration of megalithic monuments. Local writer Paul Waldron explains that the full meaning of the name Béal Átha hAmhnais remains elusive: "The origins of that name has been the subject of much study and debate over the centuries. Beal Átha means the ford mouth, but what the last element means is still the subject of debate. Suggestions range from derivatives of 'Abhann', meaning river, or of 'amhnas', said to mean 'strife' or 'plunder'."
The town is a mixed community where farming, private business and industry are the main sources of employment. Employment, infrastructure and continued development of the town are key issues addressed by the Ballyhaunis Local Area Plan 2010-2016, adopted by Mayo County Council on 8 February 2010.
It has become a cosmopolitan area in recent decades. Even prior to Ireland's period of economic growth between 1995 and 2007, there were children of at least seven nationalities attending schools in the town. These included Pakistani, Syrian, Russian, English, Polish and Lithuanian. More recently, other nationalities have been attracted to Ballyhaunis, with immigrants from several countries in Africa and Eastern Europe now settled in the area. There are two Catholic churches in the town and it is also home to Ireland's only purpose-built mosque outside Dublin, which is the second most westerly mosque in Europe, after the Lisbon Mosque. The results of the 2006 census showed that some 36 per cent of Ballyhaunis residents are non-Irish. The town's population in the 2011 Census was 3,008.
Ballyhaunis is located in both the Roman Catholic and civil parishes of Annagh.