Italia was founded here in 1882 by Irish-born entrepreneur William MacWilliams at milepost 18 on the Florida Transit Railroad, which ran from Fernandina to Cedar Key. The town began when former U.S. Senator David Levy Yulee, president of the Florida Transit Railroad, convinced MacWilliams to build a brick factory here. Timber businesses soon followed with the opening of a wood-shingle mill and a sawmill to use nearby forests. By 1885, Italia had about 100 inhabitants and included a depot, post office, and general store, and products made here were used in commercial and residential buildings in Fernandina and many other northeast Florida locations. Thomas J. Shave brought new life to Italia when he built a turpentine still in 1905, and by 1910 turpentine was the area's primary business. Italia suffered a fatal blow in the mid-1920s when the railroad was re-routed from Callahan to Gross, leaving the town without a viable link to distant markets. MacWilliams named the town Italia, reflecting a then-popular Florida marketing campaign that promoted the state as "America's Italy" because of its similar peninsular shape and temperate climate.