First settled in 1814 by the Daniel Nelson family, Nelsonville was incorporated in 1838 with Charles Cable as its first mayor.
Nelsonville blossomed into a classic Appalachian town by the mid-19th century, relying on the extractive industries of coal, clay and salt. Like many large mining towns, Nelsonville was home to a large hotel, The Dew House, and a thriving theater, Stuart's Opera House, both located on the Public Square. The large amount of coal extracted from the Nelsonville area earned Nelsonville the nickname "Little City of Black Diamonds."