Founded by the Missouri Pacific Railroad, Blackwater's economy was largely defined by freight until the mid-twentieth century.

[5] The city has preserved a number of historic, rail-related structures that have been repurposed as museums, hotels, or antique shops.

A number of smaller towns and villages sprang up among the route, which provided a vital economic lifeline to otherwise isolated areas.

First consisting of railroad workers, the discovery of a rock quarry several miles outside the town provided a new set of economic opportunities, drawing miners to the area.

In subsequent decades, the town would develop drugstores, banks, hardware stores, millinery shops, cafes, a hotel, lumber yard, livery stables, a creamery, meat market, blacksmiths, and saloons.

[8] At the coming of the Second World War, Blackwater had a population of about 650 people, but the economic and social changes of the postwar era presented a new series of challenges.

The Missouri Pacific Railroad, which declared bankruptcy during the Great Depression, did not provide the same labor opportunities it had previously.

As for many other small towns, Blackwater found itself losing its young people to larger metropolitan areas with available jobs, and the population dwindled.

In 1950 the Blackwater Stone Company, the town's largest employer, accidentally hit water while detonating within the quarry, which flooded.

The site is on the south bank of the Blackwater River, and the community of Nelson in adjacent Saline County lies two miles to the west-northwest.