[3] It was named in honor of George Alexander Madill, an attorney for the St. Louis-San Francisco Railway.

Madill was founded in 1900 by William N. Taliaferro, who had settled in 1886, in what was then known as Pickens County, Chickasaw Nation, in the Indian Territory.

[7] Taliaferro owned a 600 acres (240 ha) farm and operated some ranches in the nearby town of Oakland, 2 miles (3.2 km) northwest of Madill.

Oakland had been the area's largest town, but the St. Louis, San Francisco and New Orleans Railroad building through the town caused Madill to grow and Oakland, two miles northwest, to decline.

[6][8] A post office was established at Madill on April 29, 1901, The city was chartered on September 12, 1902.

The first public school opened in a four-room frame structure built on the south side of the town in 1903.

[6] Farming and ranching became the town's principal industries early in its history because the surrounding area was highly fertile and the railroad provided good transportation to markets.

[11] BNSF Railway, the successor railroad to the Frisco, has a crew change point here on the line from Dallas to Tulsa.

Madill has also benefitted from tourism since the completion of Denison Dam and Lake Texoma in 1944.

Specifically, the city has hosted the National Sand Bass Festival every June since 1963.

The week long event also offers fishing, carnival rides, musical entertainment, and arts and crafts.