Limon is the most populous town in Lincoln County. As of the census of 2000, there were 2,071 people, 823 households, and 517 families residing in the town. The population density was 432.2/km sq (1,118.0/mi sq). There were 934 housing units at an average density of 194.9/km sq (504.2/mi sq). The racial makeup of the town was 93.00% White, 0.29% African American, and 1.01% Native American.

Limon is known as the "Hub City" of Eastern Colorado because Interstate 70, U.S. Highway 24, 40, and 287 and State Highways 71 and 86 all pass through the town.

Limon is the western terminous of the Kyle Railroad and it is here the shortline interchanges with the Union Pacific Railroad.

There were 823 households out of which 36.8% had children under the age of 18 living with them, 49.1% were married couples living together, 10.2% had a female householder with no husband present, and 37.1% were non-families. 33.9% of all households were made up of individuals and 14.6% 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 3.21.

In the town the population was spread out with 31.1% under the age of 18, 5.8% from 18 to 24, 28.0% from 25 to 44, 18.8% from 45 to 64, and 16.3% who were 65 years of age or older. The median age was 36 years. For every 100 females there were 89.1 males. For every 100 females age 18 and over, there were 82.7 males.

The median income for a household in the town was $33,565, and the median income for a family was $42,850. Males had a median income of $30,938 versus $23,705 for females. The per capita income for the town was $16,256. About 6.2% of families and 10.3% of the population were below the poverty line, including 12.4% of those under age 18 and 11.2% of those age 65 or over.