The hamlet is the result of a land-development initiative that was started in 1894 when Chicago land entrepreneur John Linderholm bought 60,000 acres (24,000 ha) in the region under the Southern Texas Colonization Company's name.

A post office was founded in 1895, and residents from several Midwest states moved to the area in collaboration with the railroad.

Chesterville had about twenty businesses and numerous churches during its heyday, catering to a population of between 150 to 200 people.

However, the land in the area was more suitable for large-scale stock-raising and rice cultivation than for small farms; as a result, Chesterville's population dropped to 25 by 1933 and to 75 by 1914.

There was just one company left by the middle of the 1980s to meet the demands of the big rice farms in the region.