When traveling Franciscan friars came through the area, they transposed the name into "the place of the fire of angels."  The mid-1800s would see the arrival of Lucien B. Maxwell and Christopher “Kit” Carson, who would soon coin the phrase “Angel Fire,” in 1845.

Before 1864, when Lucien B. Maxwell acquired the full rights to the 1.7 million acre land grant, known as the Maxwell Land Grant, the narrow Moreno Valley was pasture and hunting land occupied almost exclusively by the Moache Utes and Jicarilla Apaches. In 1867, however, everything changed when gold was discovered on Baldy Mountain, overlooking the Moreno Valley. Within a year, 7000 fortune hunters flooded the area. They established Elizabethtown, a typical wild west settlement salted by vigilante justice and a 17 year county war between land owners and squatters.

In 1918, Charles and Frank Springer, owners of the CS Ranch, completed Eagle Nest Dam, taming the Cimarron River and conserving water for Colfax County.

Surrounded by rolling pasture and stunning mountains, the fishermen began to arrive when the lake was stocked with trout. Along with the fishermen, entrepreneurs also arrived, building businesses and transforming the quiet farming community into a tourist mecca, providing entertainment to the visiting cowboys, fishermen and other tourists. At first the small settlement was called Therma but later it changed its name to Eagle Nest with the arrival of most mail addressed as such.

In 1954, Roy and George LeBus of Wichita Falls, Texas, bought the 9,000 acre Monte Verde Ranch and in 1956 purchased another 14,000 acres, comprising the Cieneguilla Ranch, from the Maxwell Land Grant Company. Ten years after the initial purchase, they decided to develop the property into a resort community. They called the new development "Angel Fire", the phrase that Kit Carson had long ago coined after the old Indian lore. In 1966 construction began in earnest and after about 18 months the early ski trails were cut, a nine hole golf course was complete and Monte Verde Lake was ready for visitors. Word of the resort spread quickly and soon visitors from New Mexico, Oklahoma, Texas and Kansas began to come to Angel Fire. As the resort continued to grow, the demand for new capital for expansion was required and the Lebus family took on additional investors in 1969, beginning to back out of active ownership.