The town of Egersund was established as a municipality January 1, 1838 (see formannskapsdistrikt). It was merged with the surrounding municipality of Eigersund January 1, 1965.
Egersund has one of the best natural harbours in Norway, and it used to be the largest harbour in Norway when measured in quantity of fish brought in each year (surpassed by Ålesund in 2006). Several internationally known companies have divisions here, like Navico (earlier Robertson autopilots) and Jeppesen Norway formerly C-MAP Norway (producer of electronic sea-maps). In addition, the Aker Solutions corporation owns and runs a large installation here which specializes in the building of parts for oil platforms. Most of the industry is related to the sea and to boats.
People have lived around the district of Egersund since the stone ages. Several places one can find ruins of settlements dating back to the age of migrations in Norway (400–600 BC). The name "Egersund" derives from the Norse name for the strait between Eigerøy and the mainland, which was called Eikundarsund. The name of Eigerøy (Norse: Eikund) comes from the rich deposits of oak trees (Eik = Norwegian for oak). The name is among the oldest placenames in Norway. It can already be found in the form Eikundarsund in the Norse saga of Olav the Holy, written by Icelandic author Snorri Sturlasson in the 13th century. From around the year 1000 Olav the Holy's fleet was here often. We can also find the name in texts and scaldic poems from Olav's saga.