Kapowsin was founded in 1901 when the Kapowsin Lumber Company built a sawmill at the community's present site. Located on the north end of Kapowsin Lake, the community was a thriving lumber town in the early part of the 20th century, with a high school, shops, and trades, and a population of about 10,000. After a decline in the timber industry, the town diminished in size into a neighborhood center, with a store, tavern, post office (US ZIP code 98344), fire station and grange hall. Kapowsin High School was abandoned in 1949 after being damaged in an earthquake.
Kapowsin is located partially in the Bethel School District and partially in the Eatonville School District, and Kapowsin Elementary School is located nearby. Secondary students attend Frontier Junior High and Graham-Kapowsin High School, which opened in 2005. Tacoma Rail's freight line to Morton, Washington, runs through the town.