Originally known only as the community of Jeptha, Rosman was established as the town of Toxaway in 1901 and kept that name for two years. By 1903, J. Francis Hayes had built his new resort in Sapphire, named Toxaway Inn, dammed the river to build Lake Toxaway, and used a depot stop also called Toxaway to reach the resort. This created confusion with the town of Toxaway, which was pressured to change its name. The new name of Eastatoe was adopted in honor of the old Cherokee trail that crossed the town's boundaries, but residents were not satisfied. Some wanted to return to Toxaway, claiming it had been theirs first, while others voted to name the town French Broad. Industrialist Joseph Silversteen, who established Toxaway Tanning Company, settled the dispute by combining three letters from the last names of his financial partners, Rosenthal and Ormansky, to form Rosman, which became the town's official name on July 18, 1904.