Elista was founded in 1865 as a small settlement, the name is from Kalmyk els(e)n 'sand(y)'.[1] In November 1920, Elista became the administrative center of Kalmyk Autonomous Oblast. By the early 1930s, Elista was transformed into a small city as the collectivization policies of Joseph Stalin forced many Kalmyks to abandon their traditional pastoral nomadic lifestyle in exchange for a modern, sedentary, and urban lifestyle. In October 1935, Elista was recognized as the capital of the Kalmyk ASSR. In late 1942, the city was briefly occupied by the German army. Because of alleged collaboration between the ethnic Kalmyks and the Germans, on December 27, 1943, the Kalmyk ASSR was dissolved and its ethnic Kalmyk residents were forcibly exiled to Siberia. Russian people were brought in to repopulate Elista whose name was changed to Stepnoy (Степно́й). It was called Stepnoy until 1957, when the survivors of the deportations were allowed to return from exile.

Some western tourists started to visit Elista from the mid-1990s, and more after it received publicity as the host city of the 1998 Chess Olympiad. The city is safe and has little traffic. On the outskirts of Elista, there are vast grasslands.