In 1879, Harry Pye, an Englishman, was hauling freight for the army to the post at Ojo Caliente when he searched for shelter near dusk where roaming Apache parties would not spot him. In the morning he discovered silver chloride ore nearby, and later, with some friends, returned to stake claims.

The town was named Chloride for the ore found there, and by 1881 the so-called "Pye Lode" had attracted hundred of prospectors. The town of Chloride became the center for all silver mining in the area, although there were other smaller towns in the hills nearby .

In an attempt to overcome the all-male status of the town, a free lot was offered to the first lady who moved to Chloride.

Between three hundred and five hundred people lived in Chloride during the peak years of the 1880s. Since no railroad came to Chloride, stages and freight wagons carried passengers, ore, and supplies through Cuchillo to smelters at Socorro and even Denver.

Today there are still a few people living in Chloride.