BHOD was established and constructed in 1942, to help meet the Army's increased ordnance handling needs caused by World War II. Because of the relative remoteness of the location, nearly all of the facility's civilian workforce lived in federally owned housing at the depot; this residential community was known as Igloo, a name derived from the characteristic shape of the munitions storage buildings constructed at the site. The Igloo community included public schools, a hospital, post office, church, and shopping and entertainment facilities including a theater, swimming pool and a recreation center.
The level of employment at BHOD varied over the years, increasing during periods of war. During typical peacetime periods of the 1950s, between 700 and 750 workers were employed at the site.
BHOD was renamed "Black Hills Army Depot" (BHAD) in 1962.
The Depot was closed in 1967, and the Igloo community was abandoned. A large number of former Depot buildings remained at the site in 2007.