In 1872 the land was purchased by John Shortridge, an English immigrant who intended on building a textile mill along a creek.

[11] Seaboard Air Line Railroad decided to establish its regional headquarters there, and Hamlet rapidly grew thereafter.

By the end of World War I, 30 trains passed through Hamlet daily, and the corporation decided to construct a maintenance shop, a roundhouse, and a shipping yard.

After World War II, an $11 million classification yard, the first one in the Southeastern United States, was established[13] about one mile north of town, opening in 1954.

[16] The Seaboard Line carried mostly freight traffic, but also brought tourists through Hamlet on the Orange Blossom Special, the Boll Weevil, and the Silver Meteor.

Throughout the late 19th and early 20th centuries Hamlet was visited by prominent persons including Booker T. Washington, William Jennings Bryan, Franklin D. Roosevelt, Buffalo Bill, Jenny Lind, and Enrico Caruso.

[19] As a result, Hamlet developed a large middle class, unlike the nearby city of Rockingham, which was home to many poorer textile mill workers.

[20] Hamlet's economic situation came under strain beginning in the 1960s, as the railroad faced increasing competition from growing road networks, trucking, and air travel.

It also froze wages, terminated some positions, and reduced passenger services, diminishing the number of outside visitors to the town.

[21] A K-Mart and Walmart were built in Rockingham in the 1970s, providing that municipality with tax revenue and pulling Hamlet's customers away from their own town.

[23] Racially-charged riots broke out in June 1975 after a Hamlet police officer discharged his gun during an altercation with a black woman.

[24] By the late 1980s and early 1990s, many businesses along Main Street and Hamlet Avenue were vacant, and the Terminal Hotel had become a flophouse.

Seaboard's facilities employed less than 600 people, and the Hamlet Depot was only serviced by Amtrak passenger trains twice a day and visited occasionally by railfans.

[31] State authorities imposed a record fine upon the company for the violations and the incident brought negative national attention to the town.

At Monroe, North Carolina, the line splits northwest to Charlotte and Bostic, and one continues west to Atlanta, Georgia, originally on to Birmingham, Alabama; however, tracks were removed in 1987.

[41] Known as "The Hub of the Seaboard," Hamlet had seven hotels and numerous boarding houses and restaurants catering to transferring rail passengers.