It is bordered by the Los Angeles districts of Mission Hills on the west, Arleta on the south, Sun Valley on the southeast, Lake View Terrace on the northeast, and by the city of San Fernando on the north. Major thoroughfares include San Fernando Road, Van Nuys Boulevard, and Laurel Canyon Boulevard. The Golden State and Ronald Reagan freeways run through the district.
Pacoima's first inhabitants were the Gabrielino-Tongva people, a California Indian Tribe, historically known as San Gabriel Band of Mission Indians. From the Gabrielino Indians Pacoima received its name, in their language it means "Rushing Water". They gave it this name due to the large streams of water which flowed though the area down from the mountain canyons.
The Mexican government secularized the mission lands in 1834 by taking them away from the church. The first governor of California, Pio Pico, leased the lands to Andrés Pico, his brother. In 1845, Pio Pico sold the whole San Fernando Valley to Don Eulogio de Celis for $14,000.00 to raise money for the war between Mexico and the United States, settle by a Peace Treaty signed at Campe de Cahuenga in 1845, and by the treat of Guadalupe Hidalgo in 1848. The Pacoima area became sheep ranches and wheat fields.
In 1887 Charles Maclay, a former Republican California State Assemblyman and California State Senator purchased 56,000 acres (227 km2) in the area with a loan of US$117,500 from a friend, the industrialist Leland Stanford. Maclay subdivided the tract into agricultural parcels, most of which were used for the production of Southern California staples such as citrus, nuts, beans, wheat, and vegetables. As was the case in most of the San Fernando Valley, the lure of plentiful, cheap water from the Los Angeles Aqueduct proved irresistible to Pacoima's farmers. Los Angeles annexed the land, including Pacoima, as part of ordinance 32192 N.S. on May 22, 1915.
During World War II, the rapid expansion of the workforce at Lockheed's main plant in neighboring Burbank and need for worker housing led to the construction of the San Fernando Gardens housing project. By the 1950s, the rapid suburbanization of the San Fernando Valley arrived in Pacoima, and the area changed almost overnight from a dusty farming area to a bedroom community for the fast-growing industries in Los Angeles and nearby Burbank and Glendale, with transportation to and from Pacoima made easy by the Golden State Freeway.
Throughout its history, Pacoima was a place where Southern Californians escaping poverty in rural areas settled. In the post-World War II era, many African Americans settled in Pacoima after arriving in the area during the second wave of the Great Migration since they had been excluded from other neighborhoods due to racially discriminatory covenants. By 1960, almost all of the 10,000 African Americans in the San Fernando Valley lived in Pacoima and Arleta. Timothy Williams of the Los Angeles Times wrote that Pacoima "became the center of African-American life in the Valley."
On January 31, 1957, a Douglas DC-7 operated by Douglas Aircraft Company was involved in a mid-air collision and crashed into the schoolyard of Pacoima Middle School. By February 1, seven people had died, and about 74 had been injured due to the incident. A 12-year old boy died from multiple injuries from the incident on February 2. On June 10, 1957, a light aircraft hit a house in Pacoima; the four passengers onboard died, and eight people in the house sustained injuries.
In 1966, Los Angeles city planners wrote a 48-page report criticizing Pacoima for failing to have a coherent structure to develop businesses in the central business district, lacking civic pride, and having poor house maintenance.
By the late 1960s, immigrants from rural Mexico began to move to Pacoima due to the low housing costs and the city's proximity to manufacturing jobs. African Americans who were better established began to move out and, in an example of ethnic succession, within less than two decades, the African American population was replaced by a poorer Latino immigrant population. 75% of Pacoima's residents were African Americans in the 1970s. According to the 1990 U.S. Census, 71% of Pacoima's population was of Hispanic/Latino descent while 10% was African American. Immigrants from Mexico, Guatemala and Salvador settled in Pacoima.
The closing of factories in the area around Pacoima in the early 1990s caused residents to lose jobs, reducing the economic base of the city; many residents left Pacoima as a result. By 1994, Pacoima was the poorest area in the San Fernando Valley. One in three Pacoima residents lived in public housing. The poverty rate hovered between 25% and 40%. In 1994, Williams wrote of Pacoima, "one of the worst off" neighborhoods in Los Angeles "nevertheless hides its poverty well." Williams cited the lack of homeless people on Pacoima's streets, the fact that no vacancies existed in Pacoima's major shopping center, and the presence of "neat" houses and "well-tended" yards. Williams added that in Pacoima "holding a job is no guarantee against being poor." In 1994, Howard Berman, the U.S. Congress representative of an area including Pacoima, and Los Angeles City Council member Richard Alarcon advocated including a 2-mi2 (5.2-km2) area in the City of Los Angeles's bid for a federal empowerment zone. The proposed area, with 13,000 residents in 1994, included central Pacoima and a southern section of Lake View Terrace.