Lincoln County was created by the Legislative Assembly on February 20, 1893, from the western portion of Benton County and Polk County. The county adjusted its boundaries in 1923, 1925, 1927, 1931, and 1949.

At the time of the county's creation, Toledo was picked as the temporary county seat. In 1896 it was chosen as the permanent county seat. Three elections were held to determine if the county seat should be moved from Toledo to Newport. Twice these votes failed in 1928 and 1938. In 1954, however, the vote went in Newport's favor. While Toledo has remained the industrial hub of Lincoln County, the city has never regained the position it once had.

Like Tillamook County to the north, for the first decades of its existence Lincoln County was isolated from the rest of the state. This was solved with the construction of U.S. Route 101 (completed in 1925), and the Salmon River Highway (completed in 1930). In 1936, as one of many federally funded construction projects, bridges were constructed across the bays at Waldport, Newport, and Siletz, eliminating the ferries needed to cross these bays.

The northern part of Lincoln County includes the Siletz Indian Reservation, created by treaty in 1855. The reservation was open to non-Indian settlement between 1895 and 1925. The Siletz's tribal status was terminated by the federal government in 1954, but became the first Oregon tribe to have their tribal status reinstated in 1977. The current reservation totals 3,666 acres (15 km²).