Settled by a few farm families in 1901, the tiny settlement was transformed into a busy railway worker's camp called Maquinachayoq (possibly from Quechua makina (a borrowing from Spanish máquina) machine / locomotive, train, -cha, -yuq suffixes, "the one with a little machine, locomotive or train", Makinachayuq) during the construction of the railroad through there in the late 1920s. The town was the central hub for worker lodging and their equipment until the railway was completed in 1931.
Machupicchu serves as a terminal for the PeruRailCusco. Trains serve locals and tourists arriving from Cusco and Ollantaytambo to visit Machu Picchu. A sheltered souvenir market is adjacent to the train station. Avenue Pachacutec is the main and only thoroughfare of the town, connecting the baths to the town's main square.
The Central Machupicchu Hydroelectric Plant (Hidroelectrica) is nearby at the Urubamba River. It generates about 90 MW for the regions of Cusco, Puno, and Apurímac. It was first constructed between 1958 and 1965 and expanded between 1981 and 1985. The plant was damaged by a landslide on 28 February 1998 and ceased operations until 13 July 2001.