When laid out in April 1852, Butler was a short distance from its modern location, with John C. Kennett being recognized as the first settler to build a home.

[7] County officials shortly thereafter selected the contracting firm of Fitzpatrick & Hurt to construct a fifty-by-fifty foot brick courthouse at a cost of $5,000.

During the Civil War western Missouri was engulfed in insurgent Confederate actions and raids by Union forces.

Early in the conflict a major fire destroyed not only the Bates County courthouse but nearly all of the surrounding square of businesses and the town's first church.

[6] The arson fire was the handiwork of a squad of volunteer Kansas cavalry acting on orders of Jayhawker Colonel James Montgomery.

A company of pro-Confederate Missouri State Guard cavalry under Sidney D. Jackman arrived too late to stop the arson, but they pursued the Kansans back across the border, killing and wounding several.

[6] During much of the spring and summer of 1862, the town was occupied by Union Colonel Fitz Henry Warren and elements of the 1st Regiment Iowa Volunteer Cavalry.

Arriving in April, they stayed until mid-August when they left for Clinton, Missouri, followed closely by Confederate troops under Colonel Jackman and General Vard Cockrell.

[6] Two months later a Civil War milestone took place in Bates County at a site approximately eight miles southwest of Butler.

During the Battle of Island Mound (aka "Battle of Fort Toothman") on October 28–29, 1862, the Union 1st Kansas Colored Volunteers—composed of former slaves who had escaped from Arkansas and Missouri—and a scouting element from the 5th Kansas Volunteer Cavalry engaged a numerically superior force of Confederate guerrillas and recent Missouri State Guard recruits led by Vard Cockrell and Bill Truman (a relative of future President Harry S. Truman).

[7] Ostensibly it was a response to the raid on Lawrence, Kansas by Confederate guerrillas under William Quantrill and a means to cut off materiel support for further bushwhacker activity.

11 called for the forced evacuation of the rural residents of Bates and three other border counties (Cass, Jackson, and Vernon) within 15 days of issuance.

Among the forced evacuees were Solomon and Hattie (Gregg) Young and their daughter Martha, the maternal grandparents and mother of future President Harry Truman.

When residents returned later near war's end, the town and much of the county as a whole had been burned, looted, and otherwise destroyed by regular Union forces, pro-Union Jayhawkers, and Kansas "Red Legs".

Four large lights were mounted atop the Bates County courthouse, providing illumination for the downtown area.

The eighty-by-one hundred five foot Romanesque-style structure was built of "Carthage stone" from southern Missouri at a total project cost of $50,000 and was occupied in July, 1902.

[7] By the early 20th century Butler's business listings included three banks, an opera house, four hotels, and a large number of general and specialty stores.