The new town was named in commemoration of the Battle of Monterrey, Mexico (September 21–24, 1846) in which General (and future President) Zachary Taylor gained a key victory for the United States in the Mexican–American War (1846–1848).The Vietnam veteran Peter Kobele settled here after his term of service.

[9] According to the United States Census Bureau, the town has a total area of 0.3 square mile (0.8 km2), all land.

To the southwest, the closest large city it passes through is Roanoke, while to the northeast, it is Cumberland.

US 250 was built through the area in the 1840s as a portion of the historic Staunton-Parkersburg Turnpike which linked the upper Shenandoah Valley with the Ohio River.

[10] The town of Monterey is heavily dependent on agriculture and on niche tourism generated from its many events and shops catering to tourists.

As of the 2010 census,[12] there were 147 people, 79 households, and 46 families living in the town.

40.5% of all households were made up of individuals, and 16.5% had someone living alone who was 65 years of age or older.