The area of Thorsby was first the land of the Indigenous people, specifically the Cree and Blackfoot whose territory covered the area for centuries.
The bison were an important part of the lives of the Indigenous people and could be found in huge herds in the area before settlers began to wipe them out in the late-1800s.
Nearby to where Thorsby would be established there is Pigeon Lake, a small lake of 97 square kilometres, with a maximum depth of 30 feet. Originally called Woodpecker Lake, in 1896 the Pigeon Lake Indian Reserve was established along the banks of the lake.
In the early 1900s, August Sahlstrom arrived in the area and established a post office in 1908 with his brothers Charles and Gustav. The three men operated the post office until 1923.
Needing a name for the post office, they chose to name it for their home Torsby in Sweden, and choosing to honour the Norse god Thor, gave it the name Thorsby.
The community began to grow and in 1930, the railroad came through. A wye was established near Thorsby, which allowed trains to turn around and head back to Lacombe. This allowed the community to grow and become prosperous through the difficult 1930s when many communities disappeared.
By 1940, Thorsby had four churches and 50 businesses and was thriving with a population of 400 people. A great deal of trading was done in the community due to the through traffic from the railroad.
On Jan. 28, 1950, Thorsby became a village, which it remains to this day.
Two years later, a Major H.B. Ellesworth received the Distinguished Flying Cross with First Oak Leaf Cluster for his heroics during the Korean War. Born in Thorsby, he participated in an aerial flight over North Korea in a night mission where he displayed outstanding airmanship and flying skill. He sighted a locomotive and six box cars and a series of bombing attacks were run, as well as low level strafing passes.
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