[5] The town was founded in 1889 in the Choctaw Nation, Indian Territory as a coal mining camp named Liddle.

The Southwestern Coal and Improvement Company, a subsidiary of the Missouri, Kansas and Texas Railway (MK&T) developed the site.

Work on the mine started January 2, 1889, and the first shipment of coal left Liddle on April 17, 1889.

However, a special election held on June 2, 1908, moved the seat to Coalgate.

The city had at least 65 merchants plus carpenters, doctors, veterinarians, and as many as seven attorneys and three newspapers.

[13] The city prospered until the 1920s, when the coal mines closed because of worker strikes.

From 1921 to 1923, local cotton crops were destroyed by a boll weevil infestation, and all five banks in the county closed.

After President Franklin D. Roosevelt's election, various Federal programs, such as the Civilian Conservation Corps (CCC), National Youth Administration (NYA), and Works Progress Administration (WPA), helped buoy the city's struggling economy.

The onset of World War II brought a temporary respite to the coal industry.

Oklahoma State Highway 43 runs east out of Coalgate after a T-intersection with U.S. 75/State 3.

Oklahoma State Highway 31 also passes through northern Coalgate, in a northeast–southwest direction.