A. H. Steagall and Dr. E. P. Booth purchased 300 acres of land on the north side of the Bosque River in 1868. They mapped out and platted a townsite, which they named Valley Mills. As settlers began arriving in the area, the first homes were built of logs. Soon, however, with products provided by a local sawmill, many more homes were constructed of sawn lumber. In addition to the sawmill, flour and grist mills were also built in the valley. Cotton gins were soon built, as well, to process hundreds of bales from neighboring farms. A United States post office was established in Valley Mills in 1867, with Moses Isenhower serving as first postmaster. Experiencing steady growth, the town at its peak boasted homes, general stores, a drugstore, blacksmith shop, boardinghouse, and stagecoach stop. In 1881 the Santa Fe Railroad line was built through the area, but the tracks were laid on the south side of the river about one mile from the original townsite. Soon thereafter the residents of Valley Mills moved their town to be closer to the rail line. By 1900 the original site of Valley Mills had become a ghost town. (1990)