"The Lady on the Mountain" is a rock formation on Magdalena Peak overlooking Magdalena. Spanish soldiers saw the face of a woman on the west face of the peak. A priest with them was reminded of a similar peak in Spain called "La Sierra de Maria Magdalena", so he called the New Mexico one "La Sierra de Magdalena". The pass to the south of the peak became known as Magdalena Gap, and when a town grew up it received the same name.
Magdalena has recently been trying to transform itself into an art center and cultural destination. The opening of several art galleries and the Magdalena Hall Hotel and the renovation of the Bank West building have made their mark on this high-desert village. Several rock and mineral shops have been around since the mining boom days. The ghost town of Kelly and two festivals, the Lady Magdalen Art Walk and the Old Timers Reunion and Rodeo, bring tourists to the area.
Newly paved roads, additions to the middle/high school, a public water system, trash disposal service, and the opening of a new mini-mart and gas station have improved the quality of life for its citizens. In late 2010, a discount variety store named "Family Dollar" opened next to the locally owned Trails End Market, in which the Trails End Market store then closed in 2012 due to competing with Family Dollar. In 2011 a tire shop and a blacksmith shop also opened. In June 2013 the main village well stopped yielding water, leading to a period of conservation during which other New Mexico communities and organizations donated drinking and stock water for distribution to residents until local wells were brought back into operation later in the year.