Developers began construction of the town in 1871 and the town was established in 1890. It was originally developed as a resort town for citizens of Washington, D.C. trying to escape the city in the summer.[4] When developers advertised the town upon its completion they said it had "excellent water, mountain air and magnificent scenery".[2]
The Washington & Ohio railroad (later renamed Washington & Old Dominion) played an integral role in the town's development for its first 50 years, making eight stops in the town every day.[2]
By 1901 the town had three hotels, a downtown area, and a village green. By 1912, it also had a boardwalk, a church, and two private schools, among numerous other new shops.[2]
Beginning in 1920 though the town started to decline. This happened for a number of reasons including: the loss of the boardwalk, mill, and church; the Pure Food and Drug Act's passage; and the discovery of antibiotics.[2]
The Washington & Old Dominion railroad ended service in 1968. Twenty years later in 1988, the Washington and Old Dominion Trail, built on the old railroad's right-of-way, was extended through Paeonian Springs to Purcellville, Virginia.[5]
