Anselmo began as a railroad town along the Burlington and Missouri River Railroad, where the Burlington needed a stop for water, coal, and switching facilities. After a depot was built, the town was platted in November 1886 by Lincoln Land Company engineer Anselmo B. Smith, who had platted numerous other Nebraska towns and was said to have asked to give this town his own name because he liked the beauty of the valley so well. Many early residents were railroad employees, and Anselmo soon added new businesses and became the trading center for a wide area. The City Hotel, with a double decked porch, offered modern accommodations for travelers. The first local school opened in 1887, and the local Methodist Church was established that year. St. Anselm's Catholic Church, often called the Cathedral of the Sandhills, was organized in 1905. By the 1920s, Anselmo had nearly 500 residents and thriving businesses including elevators, a roller mill, livery stables, seven doctors and dentists, general mercantile stores, restaurants, barbers, five banks, and two newspapers.