Okehampton was founded by the Saxons. The earliest written record of the settlement is from 980 AD as "Ocmundtune", meaning settlement by the Ockment, a river which runs through the town. It was recorded as a place for slaves to be freed at cross roads.
Like many towns in the West Country, Okehampton grew on the medieval wool trade. Notable buildings in the town include the 15th century chapel of St. James and Okehampton Castle, which was established by the Norman Sheriff of Devon, Baldwin FitzGilbert (d.1090).
Okehampton was the caput of a large feudal barony, which at the time of the Domesday Book was held by Baldwin FitzGilbert. After his death in 1090 the tenure of the barony is obscure until about 1153. For the next twenty years it was held by the heiress Maud d'Avranches until her death in 1173, when it passed to her daughter, Hawise de Curci (died 1219), who married Reginald de Courtenay. His French possessions were confiscated by the French King Louis VII, but were given, together with the marriage of his daughter Elizabeth de Courtenay, to the king's youngest brother who became known as Peter I of Courtenay. The Courtenay family rebuilt Okehampton Castle, but King Henry VIII seized the lands and had Henry Courtenay, 1st Marquess of Exeter executed for treason in 1539.
Okehampton was a rotten borough until 1832. Despite its small size it was allowed to elect two members to the House of Commons. The Reform Act of 1832 abolished this representation and since then it has been part of a parliamentary constituency whose electors are balanced in numbers with every other constituency in the country.