Lots for the new town were auctioned in October 1833, with proceeds from the sale financing the construction of a courthouse and jail.

The town was first called "Chambersville", but by the time of incorporation on January 7, 1835, the town name had been changed to "Lafayette", named after the Marquis de Lafayette; its spelling was changed to "LaFayette" due to the influence of newspaper editor Johnson J. Hooper, who created a fictional character called Captain Simon Suggs, a backwoods southerner who pronounced the town's name as "La Fait".

[6] Scenes from the movie Mississippi Burning were filmed at the Chambers County Courthouse and in downtown LaFayette.

An 8-foot (2.4 m) bronze statue, executed by sculptor Casey Downing Jr. of Mobile, Alabama, was erected in Louis' honor in front of the Chambers County courthouse in 2010.

[7] It is also the hometown of Hoyt L. Sherman, one of artist Roy Lichtenstein's principal art professor/mentors at Ohio State University.

Alabama State Route 50 also runs through the city as a southern bypass, leading east 14 mi (23 km) to Lanett on the Alabama-Georgia state line, and southwest 18 mi (29 km) to Camp Hill.

Alabama State Route 77 begins in the northern part of the city and connects LaFayette to the town of Wadley, 20 mi (32 km) to the northwest.