The first settlement in the Magnolia area was a town named Mink Prairie, founded in about 1845 when a farmer named Mink built a homestead. By 1850, the town's name was shortened to Mink. After the Civil War, Mink's population swelled due to an influx of settlers from Kentucky and Tennessee, resulting in a post office being built in 1885. In 1902, the International-Great Northern Railroad (now operated by Union Pacific), decided to build a railroad to the north of Mink, causing most of the residents of Mink to move closer to the railroad line. The new town was named Melton in honor of a wealthy landowner who lived in the area. However, the postal service kept confusing the name with a different town called "Milton," prompting local officials to change the name to Magnolia. In 1903, the Mink post office moved to the new town of Magnolia, as the old town of Mink would soon become abandoned.