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Capac was founded and platted by a group of men from Romeo headed by George R. Funstan and Judge DeWitt C. Walker in 1857. The judge named it after Huayna Capac, Sapa Inca of the Inca Empire. A nearby post office named "Pinery" was transferred to and renamed "Capac" in January 1858. The Grand Trunk Railroad opened a station in 1866. Capac incorporated as a village in 1873.
Preston Tucker, designer of the 1948 Tucker Sedan, was born near Capac in 1903. Tucker is the subject of the 1988 movie Tucker: The Man and His Dream.