Situated at the upper end of the John Day Valley, on the John Day River. Prairie City grew out of the former mining camp of Dixie, which was situated a short distance up Dixie Creek. Prairie City was the western terminus of the Sumpter Valley Railroad which extended over Dixie Summit and Tipton to Seneca and then to Baker City; passenger train service was discontinued in 1937, freight service continued through World War II, but the line was abandoned in 1947.

Prairie City boasts a number of historic stone buildings and the Dewitt Museum in the former Railroad Depot. The current economy includes ranching, and a number of retail vendors and public services.

If you are into motorcycles, ATVs, hunting, snowmobiling, bicycles, mountain bikes, hiking, backpacking or cross country skiing, Prairie City is the hub of it all. The valley is surrounded by mountains. Within National Forest, State and BLM lands there are hundreds of miles of paved and gravel roads, two-tracks, single tracks, and trails open to the public. You will never run out of places to explore!