With its origins dating back to Celtic times of 300 BC, Axminster lies on two major Roman roads: the Fosse Way from Lincoln to Seaton, and the Dorchester to Exeter road but the Saxons settled here in the 7th century and great examples of ancient architecture are dotted in around the town.

Axminster was recorded in the late 9th century as "Ascanmynster" and then in the Domesday Book of 1086 as "Aixeministra": The name means "monastery, or large church by the River Axe" and is a mixture of languages; the river name Axe has Celtic origins, and mynster is an Old English word.

Whilst famously lending its name to a particular weave of carpet, the history of the town is very much linked to the carpet industry. Started by Thomas Whitty, at Court House near the church in 1755, the completion of the early hand tufted carpets was marked by a peal of bells from the parish church as it took a great amount of time and labour to complete them. Axminster Carpets are still the town's most famous export in modern times

In 1210, a charter was granted to the town that included the right to hold a weekly cattle market which took place in the market square untill it was moved to Trinity Square in 1834. It then moved in October 1912 to a site off South Street where it was held for 94 years. It finally closed in 2006 in the aftermath of the 2001 United Kingdom foot-and-mouth outbreak. A building on the site then continued to be used for a general auction until all the buildings were demolished and replaced by a housing development.

The town was on the coaching route from London to Exeter. In 1760 a coaching inn named The George Hotel was opened on the corner of Lyme Street and Chard Street; in it's hey day over 16 coaches a day would stop at the hotel for refreshments and to change horses.

The Trafalgar Way is the name given to the historic route used to carry dispatches with the news of The Battle of Trafalgar. In 1805 they travelled overland from Falmouth in Cornwall, to the Admiralty in London and Axminster was on route; there is a plaque commemorating this fact in the town centre.

Axminster railway station was opened on 19 July 1860, with the London and South Western Railway (LSWR) offering direct services between Queen Street Station in Exeter and Yeovil. The station building was designed by the LSWR's architect Sir William Tite in mock gothic style. In 1903, the branch line from Axminster to Lyme Regis was opened; this closed in the 1960s with the Beeching cuts.  Axminster now has excellent rail links to London and Exeter

Axminster is the southern starting point of the Taunton Stop Line, a World War II defensive line consisting of pillboxes and anti-tank obstacles, designed "to stop an enemy's advance from the west" The Taunton Stop Line ran north-south for nearly 50 miles (80 km) through Somerset, Dorset and Devon, roughly from Axminster to Chard along the River Axe, then along the Great Western Railway to Ilminster, the railway and Chard Canal to Taunton, the Bridgwater and Taunton Canal to Bridgwater, and the River Parrett to the coast near Highbridge