The town was founded in the 1890s but it wasn't incorporated in 1941.
In 1950 town earned the title "The Birthplace of Smokey Bear." Before that the U.S. Forest Service had promoted fire prevention by using posters with a bear named Smokey. This idea started in 1944 as an idea between the Forest Service and the Advertising Council. Artist Rudolph Wendelin drew Smokey Bear.
On May 4, 1950 a lit cigarette butt started the Los Tablos fire in the Lincoln National Forest. On May 6, a second fire known as the Capitan Gap fire, also caused by man, started in the same area. On May 8, a 70 mile an hour wind made it difficult to fight the fire. 19 men were trapped in a rock slide while the fire burned all around them. They were rescued without any deaths.
On May 9, a tiny badly-singed cub was rescued. It was clinging to the side of a burnt pine tree. His feet and buttocks were badly burned; he was nicknamed Hotfoot. His burns were tended to overnight at the nearby Flatley Ranch. Then he was flown by Game Warden Ray Bell to the veterinary hospital in Santa Fe. Bell later kept Smokey in his home. That same year he was flown to the national zoo in Washington DC as the official live Smokey Bear. In July 1950 U.S. Senator Chaves of New Mexico presented smokey to the school children of America. In 1952 congress passed a law that governed the commercialization of the name and image of Smokey Bear because he had become so popular. Smokey Bear was even given his own zip code due to the amount of mail he was receiving.
In 1956, Smokey Bear Club Inc. was formed in Capitan for conservation efforts. With volunteer help and funds, the town built a log museum to house the story and memorabilia to Smokey Bear. The conservation efforts of the town were recognized in 1958, when president Dwight Eisenhower awarded Capitan the honor of the first American town to receive a Smokey Bear Oscar. The log cabin museum opened in 1960 with free admissions.
New Mexico adopted the black bear as the state animal and on its golden anniversary in 1962, a female bear named Goldie, from the Lincoln Nat ional Forest , was sent to the Washington Zoo. No cubs were ever born to Smokey Bear and his mate. In the late 1970s, a State Smokey Bear Museum and Park was established, where the body of Smokey is emtombed. In 1976, when the original Smokey Bear died, upon urging by his friends, Smokey was brought back to the Capitan mountains.
In 1984 ,Rudolph Wendelin designed a 20 cent postage stamp with a bear club clinging to a burnt tree with the famous smokey bear emblem as a background. This was the first and only time the post office issued a stamp honoring an individual animal. Capitan was chosen for the first day sale of the commemorative stamp fifty years after the first smokey bear poster.