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The City of DeFuniak Springs was founded by the officers of the Pensacola and Atlantic Railroad, a subsidiary of the Louisville and Nashville Railroad. The P&A was organized to connect the terminus of the L&N at Pensacola to the western terminus of a predecessor of the Seaboard Air Line Railroad at River Junction—now Chattahoochee—in the 1880s. It was named after Frederick R. De Funiak,[5] a vice-president of the L&N. Like much of Northwest Florida, DeFuniak Springs was settled mainly by Scots from Virginia and the Carolinas.  The population of DeFuniak Springs in 2010 was 5,180.

DeFuniak Springs was established as a final-destination resort, and the developers enlisted the cooperation and aid of the Chautauqua Movement. The Chautauqua Hall of Brotherhood, an auditorium seating 4,000, was constructed on Lake DeFuniak in the center of town. Seminars, classes, and the like were held in the Hall of Brotherhood building for people on vacation. In 1975 the auditorium of the building was severely damaged by Hurricane Eloise.  However, a charitable foundation, The Chautauqua Hall of Brotherhood Foundation, Inc., has undertaken a capital campaign for the historic restoration of the building.[6] The westerly portion of the building facing Circle Drive is still in use.  The City of DeFuniak Springs has started a renovation project on the building in 2017 funded with a grant from the State of Florida.

As part of the intellectual atmosphere of the town, a college and a private high school (named Palmer College and Palmer Academy, respectively), as well as a technical school (Thomas Industrial Institute) and a teacher training school (Florida Normal College) were established in the 19th century. Florida Normal College was later incorporated into Florida State University, while the other schools closed during the Great Depression. There remains a College Avenue that once led to Palmer College which today is a residential apartment complex known as Palmer House Apartments.

As demonstrated through the Chautauqua movement, many residents of DeFuniak Springs have always had an active hand in education. In 1886, the town held an important meeting that forever changed the course of public education in Florida. At this meeting, teachers from around the state formed the Florida Education Association. This teachers' union remains the state's predominant voice for educators and is affiliated with the National Education Association and the American Federation of Teachers.

The town also contains various other historically significant landmarks. Near the Chautauqua Hall of Brotherhood building is the Walton County Library on Circle Drive, the oldest extant library in the state of Florida.[7] The library contains an interesting assortment of antiquities, including an impressive medieval weapon collection and many first-edition books. First Presbyterian Church is the only private structure in the Lake Yard, the park surrounding the lake. Also situated on Circle Drive are the Walton County Heritage Museum, housed in the former L&N railroad depot, and St. Agatha's Episcopal Church, built in 1895-1896. Although Walton County was opposed to secession, the first monument to the Confederate war dead constructed in Florida is located on the lawn of the Walton County Courthouse.

Just off Circle Drive the City is home to one of the Teslas Super Charging stations in the area.

The DeFuniak Springs Historic District is a U.S. historic district (designated as such on August 28, 1992) located in DeFuniak SpringsFlorida. The district is bounded by Nelson and Park Avenues and 2nd and 12th Streets. It contains 172 historic buildings and 2 objects.

Thanks to David Pellar for the video footage & Todd Cooper for editing