Vernon is located almost on the geographical center of Washington County with Interstate 10 just a few miles to the north. Supposedly, Vernon was named for the Virginia home of George Washington: Mt. Vernon. Vernon sits on the banks of Holmes Creek, a waterway large enough that it was used as a shipping route to towns further north. In the 1880's, the area produced a lot of highly prized gopher turtle shells, which probably contributed significantly to today's designation of the gopher turtle species as "threatened."

Like many early settlements in Florida, the pioneer settlement was founded on the edge of a major Native American settlement. When Washington County was formed, Vernon was the county seat but that was moved to Chipley in 1927: Chipley won that vote by a margin of 1.

There was a time when Vernon was somewhat famous due to the abnormally high number of residents filing insurance claims due to lost limbs. Some insurance companies were investigating to determine if the townsfolk were intentionally dismembering themselves... in terms of the national number of claims for lost limbs, Vernon accounted for 2/3 of them. In the end, there were about 50 claims made, one of them from a farmer who took out 38 separate policies covering loss of limbs. Miraculously, he lost a leg a few days after all the paperwork cleared... Also miraculously, none of the insurance companies involved could prove any wrongdoing so everyone who filed, go paid. 20 years later, filmmaker Errol Morris descended on the town to make a documentary about the story, naming it "Nub City." After receiving several death threats for his efforts, Morris refocused his film on the eccentricities of several local residents instead. He also renamed the film "Vernon, Florida."

The population of Vernon is down about 7.5% since 2000.