The city was named for Albert Alonzo Durham, founder of the nearby town of Oswego. Durham operated a sawmill and a flour mill on Fanno Creek, which flows through the city, from 1866 until his death in 1898. The site, located along the Boones Ferry Road to Portland, was originally known as Durhams Mills. In 1908, the Oregon Electric Railway established a stop called Durham at the location.Residents of the city voted for incorporation in 1966 to protect the location from industrialization of its residential areas. Today, the community is primarily residential.