Gridley and Brown first offered lots in the town for sale at a public auction on 30 April 1836 at 10:00 in the morning.

They wrote that Lexington "is located on the margin of a fine rolling prairie, near a large and inexhaustible body of the best timber the country affords, sufficient to justify the immense settlement already being made."

The great land rush that peaked in 1836 gave way to a severe lengthy national depression.

The first house was briefly occupied, but it was soon moved to the rival town of Clarksville, which was located a few miles downstream.

Because Lexington was halfway between the county seats of Pontiac and Bloomington, Spawr's house provided a convenient stopping place: Abraham Lincoln and Stephen Douglas were frequent guests.

A grain warehouse which had been built by Thomas Kincaid was hauled across the tracks, given a passenger platform, and put to use as a railroad station.

[12] The town formed its own government; their first act was to buy up the stock of the two local whiskey sellers and pour the contents of the bottles into the mud of Main Street.

The result, in Illinois, was a new state constitution that in 1870 gave the government a role in setting railroad and warehouse rates; the wording and legal arguments behind this part of the new constitution was the work of Bloomington lawyer Ruben M. Benjamin (1833–1917).

The railroad responded that it was forced to charge less to ship lumber to Bloomington because there was more competition there than at Lexington.

The case worked its way up to the United States Supreme Court where People v. The Chicago and Alton Railroad Company became part of the celebrated Granger Cases, named for the Granges of the Patrons of Husbandry, a group that had argued for rate regulation.

[16] Of all the events in the history of Lexington, perhaps the best remembered was the day President Theodore Roosevelt came to town.

By the afternoon of 15 July 1902, a crowd of twenty thousand people had gathered near the Chicago and Alton tracks.

The Chief Executive and hero of San Juan Hill shook hands with the reception committee, but declined to leave the train.

Lexington's success as a town was later assured when it became a railroad station between Springfield and Chicago.

By World War II, only two trains a day stopped at Lexington, and all passenger traffic by rail ended in 1946.

In 1915, a paved road along the former stagecoach route, which almost exactly paralleled the Chicago and Alton Railroad rail line, reached Lexington.

This paved road was known as State Bond Route 4 or SBI 4, and it followed the Pontiac Trail between Chicago and St. Louis.

For the next 50 years, Lexington was a popular stopping point on this famous American road.