Ofakim was established as a regional center for the rural communities in the area. The early residents were Jewish immigrants from North Africa and India.

In 2001, the ethnic makeup of the city was 99.7% Jewish and other non-Arab, with no significant Arab population. There were 11,200 males and 11,800 females – 41.8% 19 years of age or younger, 14.5% between 20 and 29, 18.5% between 30 and 44, 12.5% from 45 to 59, 3.6% from 60 to 64, and 9.1% 65 years of age or older. The population growth rate in 2001 was 0.6%.

About 30 percent of the residents are ultra-Orthodox, many of them newly observant. Another 30 percent are immigrants, mostly from the former Soviet Union. The rest are descendants of the founding generation, immigrants from North Africa and India who arrived in the town in the 1950s and 1960s. Ofakim also has a small community of Ethiopian Jews.

In 2000, there were 5,655 salaried workers and 300 self-employed. The mean monthly wage for a salaried worker was NIS 3,728, a real change of 7.5% over the course of 2000. Salaried males had a mean monthly wage of NIS 4,761 (a real change of 10.1%) versus NIS 2,744 for females (a real change of 2.2%). The mean income for the self-employed was 4,776. There were 526 people receiving unemployment benefits and 3,538 receiving an income supplement.

As in other development towns, the industrial sector has historically played an important part in Ofakim's economy, but less so than in most other development towns. In 1972, 32% of the salaried workers (754 people) were in this sector, and in 1983—924 people (23%). During this period, the textile industries consistently employed by far the most workers, ranging from 72% (1982–83) to 82% (1972). The Of–Ar (short for Ofakim–Argentina) textile factory was a major employer.

There are 19 schools and 4,704 students in the city – 13 elementary schools (3,079 students), and 8 high schools (1,625 students). 43.3% of 12th grade students were entitled to a matriculation certificate in 2001.

One of Israel's 14 tennis centers is located in Ofakim. It opened in 1990 and has six courts. The city also has a soccer stadium.

A train station is slated to open in 2010 with a car park for 1,000 cars, and an old industrial building is being converted into an art museum. The Nahal Shomriya cycling route around Ofakim was inaugurated in 2010. The 60-centimeter-wide single route winds through 1,500 dunams (approx 375 acres) in Ofakim Forest, passing through Nahal Shomriya and Nahal Patish, and looping around eight local moshavim.