The town lies between Codette Lake, created by the Francois-Finlay Hydro Dam (built in 1986) and Tobin Lake, created by the E.B. Campbell Hydro Dam (built in 1963). Nipawin has become a tourist destination featuring camping, boating, golfing, hunting and fishing. Nipawin hosts two annual fishing events: The Great Northern Pike Festival, a summer-long event offering prizes for catching tagged fish, and the Saskatchewan Premier's Walleye Cup, a weekend fishing derby.
Nipawin is a Cree word meaning "a bed, or resting place" which referred to a low-lying area along the river now flooded by Codette Lake where Native American women and children would camp and wait for the men to arrive from treks by canoe.
The first permanent settlement of Nipawin occurred in 1910 with the establishment of a trading post. In 1924 the Canadian Pacific Railway passed nearby, and the settlement was moved, building by building, to its current location to be closer to the railway.