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The first part Løkken is the name of one of the places, where the first mining production took place. Similar to Norwegian Nynorsklykkje - a fenced farming area, usually for livestock. The second part verk means a production place, usually a mine (see Norwegian Nynorskverk). In Danish and Swedish texts from before the 20th century attested as Lyckens Værk, Løkkens Værk, Løckens Værk etc.
Often is shortened into Løkken. Surrounding villages (such as Bjørnli, Midtskogen, Svinsøy and now abandoned Merkeshaugen) are usually considered as parts of this town, but the term Løkken is often referring to the centrum of the town (former Vavold farm; the original Løkken-toponym was located on the western side of this farm).