Megargel was founded in 1910 when the Gulf, Texas & Western Railroad extended its track from Jacksboro to Seymour and the Trinity Townsite Company laid out a new town along the tracks on land purchased from the Meade family, naming it for rail company president Roy C. Megargel. Within months, the town had almost two dozen stores, a hotel, a bank, and a post office, and residents soon organized a school district initially served by three teachers. The population continued to grow, and in 1914 the Megargel Times began publication as the city paper. In 1917 residents built a new schoolhouse, and the first graduating class in 1918 consisted of five students. A second population boom began in 1923 with the opening of the nearby Swastika oilfield, and although a disastrous downtown fire struck in 1925, Megargel continued to grow rapidly because of regional oil production. By 1926 there were approximately 350 operating wells in the vicinity, the town's first theater opened during that period, and the growing school district created one of Texas' earliest high school bands in 1927. Although the area continued to produce oil, the Great Depression and other factors caused a decline in population, and during World War II the railroad was abandoned while many residents left for military service or wartime industries. Today, oil and agriculture are important parts of the economy, and the Megargel Cemetery and other historic resources preserve links to the town's history and boom era.