Degerfors has traditionally been an industrial community closely connected to the large ironworks. The settlement (originally called Johannelund) grew up around this industry and got the status of a municipalsamhälle (a type of borough within a municipality) in 1912. Today it acts as seat of the larger Degerfors Municipality.
Nationally, Degerfors is best known for the football team Degerfors IF. Despite the relatively small size of the town, Degerfors has always had a strong local support, and played a total of 29 years in the highest division Allsvenskan. In 1997 the team were relegated and are currently 2012 playing in the second highest Swedish league, Superettan.