Gaylesville's post office was established in 1836. During the Civil War, the main body of U.S. General William Tecumseh Sherman's army camped around the town in October 1864, and a private home served as his headquarters. Despite pleas from citizens, his troops burned the mill and the bridge across the Chattooga River as they left for their infamous march to the sea. Gaylesville Academy, later Gaylesville School, the first high school in the county, was organized in 1871. Gaylesville was the first town incorporated in Cherokee County in 1886. From 1895 to 1909, a spur of the Southern Railway ran through the town to ore mines to the north.