In 1866, the Rocky Mountain Wagon Road Company built a trading post named "Kerchival City".

The Montana Hide and Fur Company later built a post and warehouse on the site and renamed it Musselshell.

[4] The town is located in eastern Musselshell County, just south of U.S. Route 12.

Montana Secondary Highway 310 (South Musselshell Road) runs through the center of the community and leads southeast 40 miles (64 km) to Custer and Interstate 94.

According to the U.S. Census Bureau, the Musselshell CDP has a total area of 2.55 square miles (6.6 km2), all land.