Challis is the largest city in Custer County, Idaho, United States. It is the county seat and its population was 1,081 at the 2010 census. The 20…Challis is the largest city in Custer County, Idaho, United States. It is the county seat and its population was 1,081 at the 2010 census. The 2020 census shows 902 residents, a 16.6% drop. Challis was founded in 1878 and named for A.P. Challis, who was a surveyor when the townsite was laid out. Challis post office was established in 1878.