The station was opened on 19 July 1860 when the LSWR opened its Exeter Extension from Yeovil Junction to Exeter Queen Street. The main offices and goods shed were situated on the east side of the line and a small engine shed was provided for the locomotive that was kept here to help trains up the 1 in 80 (1.25%) climb through Seaton Junction to Honiton. A signal box was provided in 1875, situated at the south end of the westbound platform.
Services for many years featured both express trains between London Waterloo and Devon and Cornwall as well as local services between Salisbury or Yeovil and Exeter, but in 1903 Axminster became a junction when the Lyme Regis branch line was opened. A bay platform was built on the west side of the station but the branch climbed a 1 in 80 (1.25%) to cross the main line south of the station by a bridge. There was also a short 1 in 40 connection from the goods yard directly to the branch, but this was removed in 1915. The engine shed was demolished to make room for the new branch, but a new coal stage and water tank was built next to the bay platform. The lever frame in the signal box was extended in 1903 to accommodate the new line, but alterations three years later to accommodate full signalling on the branch required the building to be extended.
In 1923 the LSWR became part of the Southern Railway during the Grouping of 1923. The platforms were lengthened in the 1930s to accommodate longer trains and the new Axminster Carpets factory making Axminster carpets opened alongside the goods yard in 1937.
On 1 January 1948 the Southern Railway was nationalised to become the Southern Region of British Railways. January 1963 saw the all the lines in the area transferred to the Western Region and this was soon followed by the Reshaping of British Railways report. On 29 November 1965 the Lyme Regis branch line was closed, although goods traffic had been withdrawn in 1960. On 11 June 1967 the main line was rationalised – Axminster was now in the middle of a 15.26 miles (24.56 km) single track section between Chard Junction and Honiton.
In the late 1980s the line found itself part of British Rail’s Network SouthEast sector, which invested in new Class 159 trains and extended the platform southwards to remove the need of passengers to pass beneath a narrow bridge to reach the 1930s extension at the north end of the site. The privatisation of British Rail a few years later saw the line and station franchised to South West Trains.