Dillsboro was founded when the Murphy Branch Railroad came to the area in the 1880s. In 1882, the first post office in the area opened. Called the Tunnel Post Office, it was named after the nearby
Cowee Tunnel. In 1882, the postmaster,
William Allen Dills, built a large home on a hill overlooking the
Tuckasegee River, later the home of
Charles Joseph Harris and now The Riverwood Shops. The unincorporated village was called Depot, New Webster, and Webster Station until the state legislature had its name officially changed to Dillsboro when the village was incorporated as a town in 1889 to honor William Allen Dills, the town's founder) Railroad executive
Alexander Boyd Andrews suggested the town be named Dillsboro. One of the oldest buildings in the town dates to the 1870s, before the town was officially founded. As of 2024, it serves as a barber shop. The building is one floor and was built on Front Street when the town was largely farmland. Around 1884, the historic
Jarrett House hotel was constructed by Dills. In a relatively short time period, Dillsboro became a thriving town; by 1888, it was the most important town on the Murphy Branch of the Southern Railway in the areas of Industry, with two sawmills, two clay mines, a locust pin company, a
corundum crushing plant, a chestnut pole yard, a chestnut corkwood yard, two
livery stables, six
general stores, a large hotel, and a shoemaker. in 2024 A rivalry existed between
Sylva and Dillsboro in their early days, as the efforts of one town were matched by the other, and the two towns were very much alike, and the same distance from the then-county seat of
Webster. But a flood in 1894 ended the milling operations of the
Blue Ridge Lumber Company, and near the turn of the century, two back-to-back floods at a
tannery construction site in Dillsboro caused owner C.J. Harris to move the factory to the present site of the Jackson Paper Plant in Sylva. Around 1899, Dillsboro was the most-populated non-county seat town in the state west of
Asheville with about 750 residents. Dillsboro's population has declined over the years, mostly due to little new housing being built in town limits and the fact that many homes are now shops in the downtown area. Since 1975, when Wade W. Wilson became mayor due to many write-in votes, Dillsboro has made a successful effort to restore many older buildings in the town to their original appearance. In 2012, the Dillsboro Dam and Powerhouse were demolished to restore the
Tuckasegee River's ecosystem. Downtown Dillsboro was partially flooded in 2024 during
Hurricane Helene.
The Jarrett House and
Elias Brendle Monteith House and Outbuildings are listed on the
National Register of Historic Places.
Gertrude Dills McKee, first woman elected to the
North Carolina State Senate, was a native of Dillsboro; she was the daughter of William Allen Dills. ==Geography==