Initial examination for the construction of what would become Penticton Regional Airport began in 1937, at two locations. The proposed areas—west of Penticton's city centre and north of the Skaha Lake—were owned by the Penticton Indian Band. The land for the airport was expropriated from the band in 1939 under the War Measures Act, with the preliminary development of the airfield completed in 1941. Because of wartime military air transportation concerns, the airport acted as an emergency landing strip until its tarmac was completed. Rights for a temporary public use airport were secured in 1945 for an operation of 24 hours a day. In 1946, more land was acquired from the Penticton Indian Band for the airport's use.

In approximately 1942 the aerodrome was listed as RCAF & D of T Aerodrome - Penticton, British Columbia at 49°28′N 119°36′W with a variation of 24 degrees E and elevation of 1,120 feet (341 m). The aerodrome was listed as "Under construction - Serviceable" with one runways as follows:

Trans-Canada Air Lines, now known as Air Canada, and Canadian Pacific Air Lines served Penticton after World War II. In 1956, the airport was granted a permanent license, replacing the temporary permit. The airport's runway was extended in 1959, and a new terminal was built in 1963. In 1968, Canadian Pacific Air Lines extended its services for the airport, scheduling two daily flights, only to be taken over by Pacific Western Airlines the following year. However, in 1988, Canadian Airlines ended this service. That was replaced by Time Air and Air BC airlines; both airlines are no longer active.

An aviation centre was constructed at the airport in 1976, which included a 12-unit motel, flight training school, and aircraft overhaul shop; the latter is no longer maintained. Later, a helicopter flight and training club was established. In September 2007, Pacific Coastal Airlines began offering daily flights from this airfield to the Vancouver International Airport and Calgary International Airport for a period of twelve months. During this time, the airline served 22,000 passengers at the airport. It has been able to support emergency Boeing 747 landings since the 1970s, but this capability has never been tested; the runway has been used by Airbus A320s, Boeing 727-200s, Boeing 737-400s, Boeing 737-700s, and Cessna 150s.

According to statistics, the South Okanagan region is underserved in terms of airports, owing to its population. The Kelowna International Airport provides international flights to 62 commercial destinations daily. South Okanagan is home to 79,475 people, totaling 25 percent of the Okanagan area as a whole. The air travel market of the local area consists of 210,000 passengers yearly. However, in 1990, the Penticton Regional Airport was considered to be the area's primary airport, hence why people questioned the need to expand the Kelowna International Airport at that time, when its runway was in the process of expansion.