The station was opened by the London, Brighton and South Coast Railway on 22 May 1865 as part of the Epsom Downs branch line. The branch was originally laid as double track to accommodate Epsom Downs horse race traffic and was electrified on 17 June 1928. In the 1940s, the station's name was painted in large letters on the roof as a navigation tool for pilots coming into Croydon Airport. Due to the destruction by fire of the Epsom Downs signal box in November 1981, the branch was singled for most of its length in October 1982 and trains stopping at Banstead now use only the Down platform where there is a shelter. The Up track and platform have been removed.