During the late 1930s, the Federal Government purchased an existing aerodrome in Cairns from the local council, placing it under the control of the Department of Civil Aviation. During World War II, the airport was used by the Royal Australian Air Force (RAAF) from 1941 onwards. In 1942, the RAAF established the 25th Operational Base Unit at Cairns, who developed it as a refuelling point for military aircraft. Surfacing and extending the main runway to support these operations was completed during 1943. The airport was used by the United States Army Air Forces as a transport base, with the 33d Troop Carrier Squadron (374th Troop Carrier Group) operating from the base during 1942 and 1943. In 1949, the main runway was lengthened to 1,730 m (5,680 ft) to accommodate larger aircraft.

Between 1940 and 1951, over £1 million was spent on upgrades to the airport, which by that time handled 11 scheduled aircraft movements per day and maintained a fire service, a meteorological office, an air traffic control tower and its own power station. The DCA further planned to install an Instrument Landing System on the main runway. Ahead of the 1956 Melbourne Olympics, the Olympic flame was carried from Athens to Cairns aboard a Qantas airliner, where the torch relay began.

During the mid-1960s, the airport was upgraded and the runway further lengthened to 2,020 m (6,630 ft) and strengthened so jets could land.

During the 1970s, Australia's two domestic airlines Trans Australia Airlines and Ansett provided regular scheduled services to most Australian capital cities and also Papua New Guinea, while in 1975 Air Niugini became the first international airline to commence flights out of Cairns, to Port Moresby in Papua New Guinea. In 1982, redevelopment of the airport commenced. This involved further lengthening of the runway to 2,600 m (8,500 ft) (making it the longest runway in Queensland) and construction of a new terminal building. The first stage of the redevelopment was finished in 1984 and a dual International and Domestic Terminal was opened.

At the end of the 1980s the second stage of redevelopment was completed. This included a new separate International Terminal, associated aprons and taxiways, costing an estimated $80 million. The main runway was again extended, to 3,196 m (10,486 ft). The third stage of redevelopment was completed in 1997, during which a three-storey Airport Administration Centre was constructed providing 4,000 m2 (43,000 sq ft) of office space.

A $200 million redevelopment of the Domestic Terminal started in August 2007 and was completed in 2010. Check-in facilities were expanded into a common-user facility for all airlines, and the building enlarged. Five new jet bridges replaced the existing three old bridges.

In December 2008, the Government of Queensland sold a 99-year lease to North Queensland Airports, a consortium of JPMorgan Asset Management, Westpac, the Private Capital Group and Perron Group. In January 2010 Auckland International Airport Limited (AIA) purchased Westpac's 25% shareholding. In March 2018, AIA sold its stake to the other shareholders with JPMorgan having 66%, the Infrastructure Fund 27% and Perron Group 7%.

A further upgrade of the Domestic Terminal commenced in 2019 and was completed in August 2020, at a total cost of $55 million. The main purpose of the upgrade was to prepare the terminal to handle the domestic portion of the airport's projected 6 million passengers annually from 2027. The floor area of the departure hall was increased to 10,000 m2 (110,000 sq ft), and an additional 2,000 m2 (22,000 sq ft) of dining and retail facilities were added. The upgrade also included expanded seating areas, a new interactive children's play screen, an upgraded Parenting Room, and a new Quiet Room.

Virgin Australia launched daily direct service to Tokyo-Haneda on 28 June 2023 with Boeing 737 MAX 8s. However, due to low demand, the route ceased on 24 February 2025.

In early 2023, it was announced that the International Terminal (Terminal 1) would undergo its first major upgrade in April 2023 to a value of $55 million. The announced upgrades would be rolled out in stages to 'minimise passenger disruptions', the first of which would feature the installation of four new glass air-bridges and the re-cladding of the exterior of the building.

In December 2023, the airport was affected by Cyclone Jasper forcing it to close for several days. In March 2024, it was announced that both Cairns and Mackay Airports would run on 100% renewable energy sources from 2025.

In August 2025, JP Morgan increased it shareholding to 100%.