Production of liquefied petroleum gas increased during the 1920s, with a total of 223,000 US gallons (840 cubic meters) recorded for the first year in 1922. In 1927, annual sales of LPG reached 1 million US gallons (3,800 cubic meters), and by 1935, annual sales of LPG had reached 56 million US gallons (210,000 cubic meters). Major industry developments in the 1930s included the introduction of rail tanker transport, gas odorization and the construction of local bottling plants. 1945 was the first year sales of liquefied petroleum gas reached 1 billion gallons a year. By 1947, 62 percent of American homes were equipped with natural gas or propane for cooking.

In 1950, the Chicago Transit Authority ordered 1,000 propane-fueled buses, and by 1958 annual sales in the U.S. had reached 7 billion gallons (26,000,000 cubic meters). In 2004, it was reported to be an $8 billion to $10 billion industry, with the US using more than 15 billion gallons (57,000,000 cubic meters) of propane annually.

The "prop-" root in "propane" and the names of other compounds with three-carbon chains are derived from "propionic acid,"[14] from the Greek protos (meaning first) and pion (fat).

Propane shortages have been reported in the United States during the COVID-19 pandemic.

Propane is produced as a by-product of two other processes: natural gas processing and petroleum refining. Natural gas processing involves removing butane, propane and large amounts of ethane from feed gas to prevent condensation of these volatiles in natural gas pipelines. In addition, refineries produce some propane as a by-product of cracking petroleum into gasoline or heating oil.

Due to the by-product nature of propane production, the supply of propane cannot be easily adjusted to meet growing demand. About 90 percent of propane in the United States is produced domestically. [18] About 10 percent of the propane consumed in the United States is imported annually, with about 70 percent imported from Canada by pipeline and rail. The remaining 30% of imported propane enters the United States by sea from other sources.

After being separated from crude oil, propane in North America is stored in huge salt caverns. Examples of these include Fort Saskatchewan, Alberta; Bellevue Hill, Texas; and Conway, Kansas. These salt caverns[19] can store 80,000,000 barrels (13,000,000 cubic meters) of propane.