Many of the early settlers were Mennonite farmers. In 1909, the Mennonite Church founded Hesston College in the town. In 1981, the Dyck Arboretum of the Plains was founded at the college; the 13 acre (52,609 m²) arboretum showcases more than 600 varieties of native vegetation.
In 1947, Lyle Yost founded Hesston Manufacturing Co. in the city. The company specialized in farm equipment, including self-propelled windrowers and the StakHand hay harvester. in 1974, Hesston commissioned its first belt buckles , which became popular on the rodeo circuit and with collectors. In 1991, the American-based equipment manufacturer AGCO Corporation purchased Hesston; Hesston-brand equipment is still manufactured in the city.
A large portion of the town was damaged by an F-5 tornado on March 13, 1990. Two people lost their lives in this storm.
According to the United States Census Bureau, the city has a total area of 2.6 square miles (6.7 km²), all of it land.
There were 1,227 households out of which 35.0% had children under the age of 18 living with them, 64.5% were married couples living together, 7.6% had a female householder with no husband present, and 26.3% were non-families. 23.7% of all households were made up of individuals and 10.8% had someone living alone who was 65 years of age or older. The average household size was 2.52 and the average family size was 2.99.
In the city the population was spread out with 24.6% under the age of 18, 14.3% from 18 to 24, 23.5% from 25 to 44, 18.0% from 45 to 64, and 19.7% who were 65 years of age or older. The median age was 36 years. For every 100 females there were 93.4 males. For every 100 females age 18 and over, there were 86.9 males.
The median income for a household in the city was $42,585, and the median income for a family was $51,474. Males had a median income of $39,891 versus $26,424 for females. The per capita income for the city was $18,138. About 3.9% of families and 5.5% of the population were below the poverty line, including 5.6% of those under age 18 and 4.9% of those age 65 or over.