The next structure built was a dwelling known as "the Hotel," owned by C. H. Thompson, and located on the east bank of Mud Creek. More homesteaders began to come to the area and among one of them was a man commonly known as "Old Man Jones," who erected a log house which he turned into a store, selling some limited supplies, but mostly whiskey.

Seeing the coming of statehood for Kansas Territory, C.H. Thompson first laid out the town in 1860, hastily constructing some makeshift log houses to give it some semblance of a town. The following year, Abilene became the Dickinson County Seat. In 1864 Dr. W. S. Moon built the Frontier Store east of the creek, carrying a small stock of general merchandise. Moon became the first postmaster and well as the Registrar of Deeds. The growth of the town was rather slow until after the the Kansas Pacific Railroad was completed to Abilene in 1867. 

However, its sleepy little existence changed when a livestock dealer from Illinois, named Joseph G. McCoy saw Abilene as the perfect place for a railhead from which to ship cattle from. McCoy chose the site because of the abundance of grass and water in the area. Before the town developed into a major shipping center, McCoy described it as: "Abilene in 1867 was a very small, dead place, consisting of about one dozen log huts, low, small, rude affairs, four-fifths of which were covered with dirt for roofing; indeed, but one shingle roof could be seen in the whole city. The business of the burg was conducted in two small rooms, mere log huts, and of course the inevitable saloon, also in a log hut, was to be found."

But, McCoy would change that. He soon sent circulars all over Texas advertising Abilene as a new shipping point, and built a stockyard and a hotel called the "Drover’s Cottage.” Before the close of the year 1867 some 35,000 cattle had been driven there for shipment on the new railroad to the eastern markets. Under his leadership, the town reigned as the primary market for Texas cattle for four years.

Though the new shipping point stimulated the growth of the town, it also brought in many undesirable characters, including gamblers, confidence men, cowboys, soiled doves and more. Much to the chagrin and disgust of the reputable, law-abiding citizens, these "undesirables" practically took possession of the place. Shooting affrays were common, and the turbulent element, being in the majority, continued to run things with a high hand, until the probate court of Dickinson County granted a petition to incorporate Abilene on September 6, 1869. Joseph G. McCoy was chosen as the first mayor and the new city government began to take steps to check the prevailing lawlessness.