An aerodrome was first established at Ceduna by the Civil Aviation Branch in 1928, ahead of the commencement of a transcontinental airmail service between Adelaide and Perth by West Australian Airways.

The first flight arrived in May 1929, with regular services established in June of the same year. It was cited as an important stopping point on the air route in 1934.

The Department of Civil Aviation recognised Ceduna's importance as an intermediate landing ground on an inter-capital air route, in 1939 announcing plans to install lighting to allow emergency landings at night and radio direction finding equipment at the aerodrome. During World War II, the Royal Australian Air Force used Ceduna as a staging base for moving aircraft between the East and West coast.

Ceduna was a focus for missionary work, with the Bush Church Aid Society supporting their local health care facilities with an aviation operation based out of the airport between 1938 and the 1960s. Flying Doctor Freda Evelyn Gibson and writer Macarthur Job began their careers from this base.

In 1950, the Department of Civil Aviation acquired land around the airport, and the current terminal facilities were constructed in 1951. The airport's national importance declined as airlines introduced more capable aircraft that could fly between Adelaide and Perth non-stop. Scheduled services connecting to Adelaide were maintained by Airlines of South Australia from the 1960s through to the 1980s and later by Kendell Airlines, although these did not always operate directly. Ownership of the airport was transferred to the local council in 1991.

In 2003, Rex Airlines introduced Saab 340 aircraft on the Adelaide-Ceduna route which had previously been operated by smaller Metroliners. This increase in capacity saw the number of passengers using the airport increase from around 10,000 per year to over 25,000 in 2009–10. By 2013, Rex were operating 12 services per week on the route. The apron was expanded to better accommodate simultaneous handling of these larger aircraft in 2015. In 2020, despite daily flights being reduced to just two per week as a result of COVID-19 travel restrictions, the council committed to a modest expansion of the terminal building to enlarge the drop off and departures areas, as well as an undercover baggage claim area and new restroom facilities.