The town was formally organized in 1884 and named after local farmer Philander Gregory, who had been a resident since 1837. In the early 1870s, the Michigan Airline Railroad Company began construction in Livingston County as part of a longer regional route, but the company went bankrupt in 1873 and work stopped. In 1882, the Grand Trunk Western Railroad purchased completed sections of the railroad grade and changed the original proposed route from Pinckney so that, instead of going southwest to Unadilla, the tracks ran west to Stockbridge before turning southwest toward Jackson. The communities of Anderson and Gregory were created along the new route.