Before it was Big Stone Gap, it was Mineral City and Three Forks, and the men who renamed it in 1888 were dreaming of an industrial future. The town sits in a valley cut through the Appalachian wall between Big Stone Gap and the neighboring town of Appalachia, and in the 1880s and 1890s its coal and iron deposits looked like the foundation of an empire. Boosters called it the Pittsburgh of the South. Birmingham, Alabama, eventually took that nickname instead, and Big Stone Gap had to settle for being smaller than its boosters imagined. But the coal economy was real, and for a long stretch it defined the town. The post office had been open since 1856; the National Register of Historic Places now lists the Christ Episcopal Church, the June Tolliver House, and the 1912 federal building named for native son C. Bascom Slemp.

The novelist John Fox Jr. moved to Big Stone Gap in the 1890s when his brothers were prospecting for coal, and what he saw became the material of his fiction. His 1908 novel The Trail of the Lonesome Pine was a national bestseller and made the southern mountains visible to readers who had never thought about them. The Trail of the Lonesome Pine Outdoor Drama, performed every summer at the June Tolliver House, is the official outdoor drama of Virginia. Fox's old home is a museum now. So is the former mansion of C. Bascom Slemp, finished in 1895 and acquired by the state in 1946 as the Southwest Virginia Museum Historical State Park. Down the street the Meador Coal Museum holds objects Henry Meador collected during a working life at Westmoreland Coal Company in the first half of the twentieth century.

In 2000 Adriana Trigiani, raised in Big Stone Gap, published a novel called Big Stone Gap. In 2014 she came back to direct the movie. It starred Ashley Judd, Patrick Wilson, and Whoopi Goldberg, and most of the crowd-scene extras were neighbors. Carmine's restaurant - the movie's stand-in for a corner of small-town Italy in the Blue Ridge - was a former gas station in town, and the soda fountain and wall posters from the shoot are still inside. Next door, the abandoned Mutual's Pharmacy stood in for Ave Maria Mulligan's workplace. The movie was made on a $3.5-million budget and opened in over a hundred theaters. For a town that had spent a century watching its coal industry contract, the chance to play itself on screen mattered.

On August 16, 2018, the Big Stone Gap town council passed a resolution backing the federal Black Lung Disability Trust Fund. It was the first municipality in the United States to do so. Coal had built the town and had also poisoned its lungs - black lung disease, caused by years of inhaled coal dust, still afflicts miners and their widows in Wise County. Today the town's economy leans harder on the prison built on the ridge above it. Wallens Ridge State Prison opened in 1999 as a supermax facility and was later downgraded to high-security. Mountain Empire Community College and a King University satellite campus draw students from four counties. In March 2008 a tornado tore a one-mile path through downtown, destroying six homes and damaging forty more. The town rebuilt. It tends to.