The town of Water Valley had its beginning in 1834, soon after this region was opened to white settlement after the federal treaty with the Native Americans. For the first decade, Water Valley was just a small collection of cabins. In 1847, the town was officially named Water Valley and a stagecoach stand opened at the new town. During the 1840s, the town continued to grow, with several businesses, doctors, lawyers and other people opening new stores on Main Street. The beginning of Water Valley’s prosperity was in 1852, when the Mississippi Central Railroad was chartered with the express purpose of opening a new rail-line between New Orleans and Jackson, Tennessee. In anticipation of the coming of the railroad, new businesses, including the town’s first hotel, drugstore and several churches, were built in the late 1850s. Water Valley was officially incorporated in 1858. Finally, in 1860, the Mississippi Central Railroad was completed, with passenger and commercial trains arriving daily. The headquarters of the Mississippi Central Railroad were also located in Water Valley. The population of Water Valley in 1860 was about 300 citizens.
Water Valley did not get to enjoy its newfound prosperity long when, in 1861, the Civil War began. During U.S. General Ulysses S. Grant’s march south towards Vicksburg, in late 1862, Water Valley was occupied by Union soldiers. During the course of the war not only was Water Valley largely destroyed, but its lifeline, the new Mississippi Central Railroad, was also destroyed. Thankfully, the Mississippi Central Railroad was soon rebuilt and, most fortuitously, the main train repair shop of the Mississippi Central Railroad was moved from Holly Springs to Water Valley, bringing hundreds of new workers and their families to Water Valley.
By 1871, there were nearly 100 businesses in Water Valley, supported by the railroad shops and new large industries which were coming to the area. In 1878 the Yellow Fever Epidemic hit Water Valley. Water Valley faired much better than other nearby towns, such as Grenada and Holly Springs, who lost hundreds of citizens to the Fever rather than the 70 or so who died in Water Valley. The town subsequently recovered quickly from the Yellow Fever, and by 1880 there were 2,200 people living in the town.
In 1882, the Illinois Central Railroad bought out the Mississippi Central Railroad, and the north/south rail-line now traveled from New Orleans all the way to Chicago, Illinois. Water Valley’s luck continued to increase, when the Illinois Central Railroad decided to place their Mississippi headquarters in Water Valley. A burst of construction activity at this time resulted in the construction of many of the commercial structures on Main Street, as well as the grand Victorian houses built throughout the town, many of which survive today.
During the 1890s, Water Valley continued to expand. New businesses and commercial ventures continued to spring up, along with new banks, the first Water and Light Plant and the original Yalobusha County Courthouse. The population is 1890 was 2,832, and by 1900 it had reached 3,813. Thirty trains, including two passenger trains, came through Water Valley every day, and nearly 1,000 people were employed by the Illinois Central Railroad. By 1910, the grand Victorian houses were giving way to new styles of architecture, including Colonial Revival and early Craftsman. Water Valley has a large amount of houses built between 1900 and 1910, many of which show elements of both the late Victorian and early Colonial Revival styles.
By 1920, the population of Water Valley reached its highest point: 4,315. Unfortunately, like many other railroad towns throughout Mississippi and the South, Water Valley experienced an economic downturn in the late 1920s and early 1930s, coinciding with the Great Depression and the loss of the railroads. The worst hit occurred in 1927, when the Illinois Central Railroad moved the train repair yards from Water Valley to Kentucky. Water Valley lost 500 families nearly overnight. By 1930, all of the railroad shops and and yards were gone. The population in 1930 slipped to 3,738. The last passenger train left Water Valley in 1939. Another major blow came in 1945, when the Mississippi headquarters of the Illinois Central Railroad were moved to Jackson, Tennessee (many of the Water Valley residents of the time, no doubt remembering the boom times of decades past, were likely angry at the Illinois Central Railroad moving the Mississippi headquarters not only out of Water Valley, but out of the State of Mississippi entirely). From 1930 to 1960, the population of the town was reduced from 3,738 to 3,206. The last train to ever come through Water Valley left in 1982, and all of the remaining rail-lines were removed and sold in 1984, ending Water Valley’s 120-year relationship with the railroad.
Beginning in the 2000s, Water Valley experienced a rebirth as new residents, many coming from the nearby college town of Oxford, came to Water Valley looking for cheaper housing options. These new residents opened several new businesses, including a grocery store, several restaurants, art galleries and a brewery on Main Street and began buying and restoring many of the older Victorian and Colonial Revival houses in town. There are frequent music and art festivals, including the annual Watermelon Festival. Though the railroad is long gone, Water Valley’s future seems secure in the hands of a new generation.