In 1934, the Special Session of the Legislative Assembly established the Montana State Board of Planning as an ex-officio part of the State Water Conservation Board. In 1935, the Legislative Assembly established the State Planning Board in its own right. Although it was to be composed of the same members as the State Water Conservation Board, the Planning Board now had its own policies and directives. The Board was charged to use scientific knowledge and foresight to assist in "solving the complex problems of Montana, thereby effecting more immediate stabilization of the agricultural, livestock, mining and other industries of the state and bringing about more efficient, economic and fuller use of the manifold resources of Montana."

The State Water Conservation Board provided funding for the State Planning Board, which could appoint an advisory council of five citizens. However, due to a lack of funding provided by the State Water Conservation Board, the State Planning Board remained effectively inactive from 1941 to 1955. In 1967, the Legislative Assembly abolished the State Planning Board and replaced it with the Department of Planning and Economic Development. In 1970, the Department consisted of five Divisions: Administration, Community Development, Industrial Development, Research, and Information Systems. The Planning and Development Commission, which consisted of seven members appointed by the Governor and included the Governor, governed the Department of Planning and Economic Development. This Department was responsible for promoting the planning and development of the state’s economy.

The 1971 Executive Reorganization transferred this Department to the newly created Department of Intergovernmental Relations as the Planning and Economic Development Division. The Planning and Development Commission was abolished at this time. The Department of Intergovernmental Relations consolidated various units that dealt with local government, federal government, or both. In 1975, the Department was renamed the Department of Community Affairs.

In 1976, Community Affairs consisted of the following Divisions and Boards: Aeronautics, the Economic Development Division, the Planning Division (these two Divisions split from the Planning and Economic Development Division; Planning Division was renamed Community Development Division in 1979), Research and Information Systems Division, Human Resources Division, Local Government Services Division, Housing Division, Centralized Services Division, the Board of County Printing, Board of Aeronautics, Indian Affairs Unit, and the Old West Unit.

Following another executive reorganization in 1981, the Department of Community Affairs was abolished. Approximately half of its Divisions were transferred to the newly created Department of Commerce, including Aeronautics, Community Development Division (formerly named Planning Division), Centralized Services, the Coal Unit, the Coal Board, Indian Affairs, the Board of Aeronautics, and the Board of County Printing.