The name of the town comes from the land owner Kolbusz. It appeared for the first time in 1503 in place where Poręby Wielkie used to exist.
As the owners of the area were the Leliwa Tarnowski, Kolbuszowa belonged to the Sandomierz County. With regards to the Roman Catholic Church Kolbuszowa was under the Kraków diocese but as of 1786 it was moved under the jurisdiction of the Tarnów diocese.
Before World War II, half of Kolbuszowa's population was Jewish. During the war, German troops burned down part of the town and about half of the Jewish population perished. In September 1941 Germans established a ghetto and interned 2500 people. In September 1942 the ghetto was emptied and its entire population was moved to a ghetto in Rzeszów.
On September 9, 1939 a 2 day battle between the Polish Army (121st light tank company) and the German 2nd Panzer Division took place here. During the war units of Polish Armia Krajowa (AK) and BCh (Polish Peasants' Battalions) operating in this area, discovered testing sites for the German V-1 and V-2 rockets in the nearby towns of Blizna/Pustkow. Red Army entered Kolubuszowa in July 1944 and local Polish AK units (as part of Operation Tempest) attacked retreating German units; several dozen of the partisans died in the operation.
After World War II, Kolbuszowa was rebuilt. New school districts were created, as well as a library and Museum of Culture.
In 1964 a new rail link was established: Rzeszów – Głogów Małopolski – Kolbuszowa. In 1971 it was extended to Nowa Dęba and Tarnobrzeg. This connected Kolbuszowa to all the major cities in Poland including the capital, Warsaw. It was a culmination of decades of preparations which started when this part of Poland was under the control of the Austro-Hungarian Empire.