[6] The name "Jellico" is a local alteration of "angelica", the name of an herb that grows in abundance in the surrounding mountains.

In 1906, a railroad car packed with dynamite exploded in Jellico, killing eight and destroying part of the town.

[1] The town quickly recovered, however, and many of the buildings in the Main Street area date from this period.

On July 6, 1944, at High Cliff (3 miles east of Jellico), a troop train carrying new recruits on the Louisville and Nashville Railroad derailed, causing the locomotive and 4 leading cars to fall 50 feet into Clear Fork; 35 people were killed and 100 more injured.

[7][8] In 1971, Indian Mountain State Park was created at the site of a reclaimed strip mine in western Jellico.

[9] The city is situated amidst the Cumberland Mountains in the valley of Elk Creek, which flows north into Kentucky.

A prominent knob known as Indian Mountain rises nearly 1,000 feet (300 m) above Jellico to the west, and is visible from most of the city.

The Tennessee-Kentucky state line forms Jellico's official northern boundary, although houses and businesses associated with the city are on both sides of the border.