Dermott was named for S. P. McDermott, who had a crossroads store and was an early postmaster. It began as a community called Dark, one and a half miles northeast, and a school in the area was named Bookout. In 1909 the town moved to the Roscoe, Snyder and Pacific Railroad, where it had a hotel and a number of businesses. The Santa Fe was built in 1911, and the competing railroads made Dermott a busy cattle shipping center with full loading pens. In 1915 the town moved to the Santa Fe Railroad. The R.S. and P. tracks were taken up in 1942, and the town gained new population in the late 1940s during the county oil boom.