Hiawassee was established along the route of the Unicoi Turnpike, a 1,000-year-old Native American trail.

[7] In the early 18th century, deerskins and furs were transported along the route from Tennessee to Savannah and Charleston for shipping to Europe.

[8] A United States fur trade factory was built in present-day Hiawassee between 1807 and 1811.

[9] Settled by whites circa 1820, Hiawassee was designated seat of the newly formed Towns County in 1856.

It was incorporated as a town in 1870 and as a city in 1916,[10] after settlers violently removed the Cherokee communities living there prior in a night of massacre in 1776.

The name of Hiawassee was originally derived from the Native American word ayuhwasi, meaning river and or valley.

The historic Towns County Jail was built in downtown Hiawassee around 1935.

The two-story rock building is listed on the National Register of Historic Places.

President Jimmy Carter visited Hiawassee in July 1980, landing by helicopter to go trout fishing with friends.