Petrey was named for the family of George Petrey and his first wife Martha Ann Blackwater, who settled in the area around 1850 after traveling from the Carolinas. Originally called Forkland, the town was renamed in honor of the Petrey family when the Atlantic Coast Line Railroad built a train station there. George Petrey's son Luke owned the land where the station was built and donated land for the right of way across his property. Petrey was a stop on the Atlantic Coast Line passenger circuit serving nearby Sellers Station, Lapine, Bradleyton, Patsburg, and Luverne until passenger service ended in 1957. Early schools reflected a population boom, with eight teachers and as many as 250 children enrolled in the town's heyday. Its businesses included several stores, cotton and grist mills, a blacksmith, and a hotel, and in the 1930s the town even had its own diesel power plant providing electricity to its citizens. Throughout most of the early twentieth century, Petrey was a farming community.