Josephine began in 1887 when the St. Louis Southwestern Railway started construction in the area and Jesse Hubbard donated four acres for a new town named after his daughter. Nearby, the earlier settlement of Reed's Chapel had formed around the Methodist Episcopal Church, established in 1881, and the Baptist Church, established in 1888, and Reed's Chapel Church also served as a school and hosted both Methodist and Baptist services before the churches moved to Josephine in 1888. In 1889, a train carried passengers from Josephine to the inaugural Texas State Fair in Dallas. In the early 20th century, Josephine developed as a commercial center with a drug store, ice cream and soda fountain, silent movie theater, ice house, furniture, lumber, tool and dry goods stores, and a bank. Fire destroyed sixteen stores in 1910, but the Baptist Church built a brick building in 1911, the Methodist Church completed its brick building in 1915, and the school was replaced in 1916. Another fire in 1935 destroyed many buildings. A new school opened in 1940 with help from New Deal programs. In 1949, Josephine School joined the community school district, and when campuses divided in 1956, Josephine became the community junior high school. The town incorporated in 1955, the Collin County Fresh Water Supply District No. 1 was created in 1957, and in 1974 Josephine Community School closed and moved to a new site west of town, where a city park now marks the former school location. In 1985, the city received the governor's community achievement award and continues to celebrate its heritage and future.