Spencer is the county seat of Roane County. Originally chartered in 1858, the town was previously known as California. It was apparently renamed for Spencer Roane, the distinguished Virginia jurist. The first local settlers of European descent were Samuel Tanner and his family and Jonathan Wolfe, who moved into a cave in 1812 near present Spencer Middle School. The following spring Tanner erected a log cabin, which stood until about 1855.

Points of interest include the Robey Theater, which opened in 1907 and is said to be the longest continuously operating movie house in the United States; Heritage Park on Market and Bowman streets, featuring a restored 1920 schoolhouse; an early 1900s oil derrick; a depot museum; and a B&O caboose. Spencer annually hosts West Virginia's Black Walnut Festival and the Tour de Lake Mountain Bike Race at nearby Charles Fork Lake. On February 15, 2001, ground was broken for a new $1.35 million two-story municipal building at the corner of Church and Court streets.

Spencer was traditionally known for the Spencer State Hospital, which closed in 1989. Roane County High School is located at Spencer. The town also includes the former home of singer and songwriter Tom T. Hall, who worked briefly as a disc jockey at WVRC-AM during the early 1960s, and the Heck Mansion on State Route 14, which is listed in the National Register of Historic Places. Griffith and Washington parks feature lighted tennis and basketball courts with playground and picnic areas, and Washington Park has an Olympic-sized swimming pool.

Spencer’s population peaked at 2,799 in 1980. In 2020, its population was 2,062.

Blacksmith artist Jeff Fetty is a Spencer native.