At the turn of the twentieth century, the people of the Hood River region in the northwest portion of Wasco County expressed a desire for political separation from the parent county. The passage of a statewide initiative established Hood River as the thirty-fourth county of the state. It was made official by a governor's proclamation on June 23, 1908. Hood River County was named after the Hood River and Mt. Hood which are both located within its boundaries. Mt. Hood was named in 1792 after Lord Hood (Samuel) who, among other things, served in the British Navy during the American Revolutionary War.

The county's boundaries have remained unchanged throughout its existence. It is bordered by Wasco County to the east, by Clackamas and Multnomah Counties to the west, and by the Columbia River to the north.  Hood River County is the second smallest county in terms of size in the state, outranking only Multnomah County, with a total area of 533 square miles.