Sitting on a wooded bend in the road not far from the Oklahoma border, the first settler to locate upon the town site was a man by the name of R. H. Nichols in February, 1870.  Soon after, the enterprise of establishing a town site was conceived, and Nichols, with six other businessmen, formed a town site company laying out lots and making plans for the new settlement. Nichols built a small house, which also served as a loan and real estate office, a general store was built, a drug store and blacksmith shop opened, the post office was established and school was taught to twenty-five pupils by Miss Dora Simmons at her father’s residence. By 1871, the site was named Elk Falls, deriving its name from a nearby waterfall at the Elk River, and became the temporary county seat of Howard County. The same year, a school building was erected in a small one-story frame house, where services for the Methodist Episcopal Church were also held.

However, elections in 1872 and 1873 failed to establish a clear choice between Elk Falls, Peru, Boston, Longton, and Howard for the county seat. After a questionable election of 1873, citizens of Boston raided Elk Falls and took the county records and furnishings. The records were hidden in Cowley County and the town of Boston posted armed guards to keep out the Howard County sheriff.

The bitterness became academic when Elk County was divided into Elk and Chataugua Counties in 1875, with Elk Falls falling within Elk County and the town of Howard becoming the county seat due to its central location.

In 1875 E. A. Hall and L.J. Johnston constructed a grist and flour mill on the river near the falls, from which the power was derived with a turbine water wheel.  The three story frame building was built at a cost of $1600.  Grinding wheat from both locals and others who shipped it in, the mill provided flour throughout the entire state.

In order to create a water supply for severe droughts that often plagued the area, a several dams were built along the Elk River, from logs, lumber, and timbers, but one after another they were destroyed by high waters during floods. Finally, a man by the name of Jo Johansen, a Swede from Minnesota, took over the mill and built the present dam, made of sandstone rocks cemented together, which has withstood the floods more than a century.