Gold was discovered in 1859 by prospector W. S. Bodey (also spelled Body), after whom the town was named. That November, Bodey perished in a blizzard after making a supply trip to Monoville.

In 1876, the Standard Company discovered a profitable deposit of gold, which transformed Bodie from an isolated mining camp of few prospectors and company employees to a Wild West boomtown. Rich discoveries in the adjacent Bodie Mine during 1878 attracted even more hopeful people. By 1880 Bodie boasted a population of nearly 10,000.

As a bustling gold mining center, Bodie was famous for its lawlessness. At its peak it had 60 saloons. Murders, barroom brawls, and stagecoach holdups were regular occurrences. Legend has it that a little girl, upon finding out that her family was moving there, prayed one night, "Goodbye God, we are going to Bodie." But a local editor claimed she had really prayed, "Good. By God we are going to Bodie."

Bodie had its own Chinatown, which had several hundred Chinese residents at one point, and even included a Taoist temple. Chinese workers earned their incomes mainly from selling vegetables, operating laundries, and cutting, hauling, and selling firewood.

Bodie has a cemetery on the outskirts of town and a nearby mortuary which is the only building in the town built of red brick three courses thick, most likely for insulation from the intense summer heat which would make undertaking a malodorous job.

As with most remote mining towns, Bodie had a popular, though clandestinely important red light district on the north end of town. From this is told the unsubstantiated story of Rosa May, a prostitute who, in the style of Florence Nightingale, came to the aid of the town menfolk when a serious epidemic struck the town at the height of its boom. She was attributed to giving life-saving care to many, but was denied burial within the gates of the town cemetery, remaining a social outcast even to her death.

In town's center stands the Miners Union Hall, a general meeting place for residents. It now serves as a quasi town museum. As a State Park, the ranger station is located in one of the original homes on Green Street. Though greatly reduced in prominence, Bodie held a permanent residency through most of the 20th century. Bodie is now the Wild West's most authentic, intact ghost town, even after a fire ravaged much of the downtown business district in 1932. The town was designated a National Historic Landmark in 1961, and in 1962 it became Bodie State Historic Park.

Today, Bodie is preserved in a state of arrested decay. Only a small part of the town survives. Visitors can walk the deserted streets of a town that once had a population of over 10,000 people. Interiors remain as they were left and stocked with goods. Bodie is open all year, but the most comfortable time to visit is during the summer months.