Fallon is primarily an agricultural community. Although the area is arid, approximately 50,000 acres (200 km²) of farmland are irrigated with water supplied by the Truckee-Carson Irrigation District. The principal crop is alfalfa. Fallon Heart O' Gold cantaloupes were once distributed throughout the nation, but are now mostly grown for local consumption. Naval Air Station Fallon also provides a significant employment.
U.S. Route 50 is the main road through town. Fallon is one of the westernmost cities on the Loneliest Road in America, the stretch of Route 50 through Nevada famed for its remoteness. Eastbound travelers must go 110 miles to find the next town, Austin, Nevada.
As of the census of 2000, there were 7,536 people, 3,004 households, and 1,877 families residing in the city. The population density was 2,474.1 people per square mile (954.0/km²). There were 3,336 housing units at an average density of 1,095.2/sq mi (422.3/km²). The racial makeup of the city was 81.32% White, 2.04% African American, 3.40% Native American, 5.00% Asian, 0.37% Pacific Islander, 3.40% from other races, and 4.47% from two or more races. Hispanic or Latino of any race were 9.89% of the population.
There were 3,004 households out of which 35.4% had children under the age of 18 living with them, 42.7% were married couples living together, 15.3% had a female householder with no husband present, and 37.5% were non-families. 30.7% of all households were made up of individuals and 11.4% had someone living alone who was 65 years of age or older. The average household size was 2.45 and the average family size was 9.06.
In the city the population was spread out with 28.4% under the age of 18, 10.3% from 18 to 24, 29.7% from 25 to 44, 19.4% from 45 to 64, and 12.2% who were 65 years of age or older. The median age was 32 years. For every 100 females there were 95.7 males. For every 100 females age 18 and over, there were 91.5 males.
The median income for a household in the city was $35,935, and the median income for a family was $41,433. Males had a median income of $35,356 versus $22,818 for females. The per capita income for the city was $16,919. About 9.5% of families and 12.6% of the population were below the poverty line, including 15.6% of those under age 18 and 10.3% of those age 65 or over.