Gander was chosen for the construction of an airbase in 1935 due to its location close to the northeast tip of the American continent. In 1936 construction of the base began and the town started to develop. During the Second World War as many as 10,000 people were settled around the airbase. Once the war was over the air base became a civilian airport and the location of the town was moved a safe distance from the runways. The present municipality was incorporated in 1958.
After the Second World War the town grew as the airport was used as a refuelling stop for transatlantic flights, earning its name "Cross-roads of the world" as nearly all overseas flights had to stop there before crossing the Atlantic. Recently efforts have been made to diversify the economy from being dependent on the airport, particularly as new aircraft designs have permitted longer-range flights without the need for landing to refuel.
Gander was the site of a major plane crash on December 12, 1985, the Arrow Air Flight 1285.