Calama is situated at an intersection of the Inca road system, where the road from Cobija to Potosí meets the road from Arequipa to Copiapó. When the conquistador Diego de Almagro arrived here it was a poor settlement with a small population. The pre-Hispanic center of the area was Chiu Chiu, since further downstream the Loa River was contaminated by the saline waters of the Río Salado, which prevented the development of agriculture.

Calama was an inn or a resting point for those who traveled the Camino del Inca (the Inca Road). In 1832 a weekly service between Potosí and Cobija was created and towards 1840, after the Bolivian Prefect was transferred from Chiu Chiu to Calama, the city became the most important administrative center in the region.

On March 23rd 1879 it was occupied by Chilean troops after the first battle against the Bolivian army during the Pacific War.

The railway arrived in 1886. In 1911 work began on the installations at Chuquicamata, and in 1951 the saline waters of the Río Salado, which prevented the development of agriculture in the land round the oasis, were diverted.

Calama is the point of access for tourists traveling to San Pedro de Atacama and to visit the villages of the interior, which are marked by their pre-Columbian past, rich in history and memories.