Like all the other oases there is little or no evidence of occupation during Pharaonic times. However, there are stories and legends associated with Farafra. One of these legends connects the oasis with the mysterious disappearance of the army of Cambyses, the Persian king who conquered Egypt in the 6th century BC. In a story told by Herodotus, Cambyses sent an army of 50,000 men from Thebes to Siwa to destroy the Oracle of Amun. It was reported that the army travelled seven days to the city of Oasis’ (perhaps Kharga), then probably via Dakhla to Farafra before striking off across the desert towards Siwa, to cross the treacherous Great Sand Sea. The army never reached Siwa and was never heard of again. Legend tells that Cambyses’ army met their fate when a great sandstorm rose up and engulfed the marching men, causing them to entirely disappear - the search for the lost army has inspired the journeys of desert explorers ever since.

The oasis is known to have been occupied during Roman times, providing a link between Libya and the Nile Valley. Long after the Romans and the Coptic Christians who followed them had left, the Arabs entered Farafra from North Africa bringing Islam with them. From this time on Farafra was the object of numerous desert raids which reduced the population as people fled to avoid exploitation and violence. This was still the case when Rohlfs arrived in 1874. The Sanusi, present for over 20 years, had brought some stability to the oasis but there were still frequent raids and Rohlfs party was viewed with suspicion at first.

Nasser's New Valley project has brought relative prosperity to Farafra as more land has become cultivable and the government actually offers incentives to settle in the oasis. There are new schools, hospitals and mosques and access to electricity. It is hoped that these inducements will encourage skilled workers, such as doctors and plumbers, to settle in the area. At the same time there is a move towards trying to keep Farafra organic and maintain a pristine environment. Tourism is encouraged but not of the kind that will damage the natural and cultural heritage of the oasis.