The town's name may come from a Choctaw word meaning "the fire gone out", referring to an entire tribe being destroyed by disease, or may be derived from "Jim Keese", a rancher who owned the land where the townsite was located, and "Otter," for Otter Creek, a tributary of the Sans Bois Creek which winds its way through town.

[5][6] Keota was founded in 1904 by the Midland Valley Railroad's land company, and a post office was established in 1905.

The town supported local cotton growers, and was a railroad shipping point for their product.

Light industry was beginning to be drawn to the town at the end of the twentieth century, though by 2013, little remained of the port but a boatlaunch The railway had long been abandoned.

[5] On December 31, 1974, the nearby Otter Creek Archaeological Site (NR 74001661) was listed on the National Register of Historic Places.

[7] According to the United States Census Bureau, the town has a total area of 0.4 square miles (1.0 km2), all land.