Beaver Dam took its name from an unusually large dam made by beavers across a nearby stream. The first settlers came in 1798 and founded the first Baptist Church here in the year Ohio County was formed. The town was incorporated in 1873. In early times, the area was covered by canebrakes and inhabited by bear, deer, and buffalo. As early as 1797, pioneers en route to the Ohio River followed a buffalo trace from this area.