The new settlers named the community for John Paulding, a local citizen who had aided in the capture of the British spy, Major Andre during the Revolutionary War.

Andre was the British Adjutant who conspired with Benedict Arnold in the betrayal of West Point, New York during the Revolutionary War.

In the late nineteenth century, developers sought local investors to support construction of a railroad through Paulding, but the planters had suffered with a low cotton market and could not invest in the project.

The railroad company shifted the route to the west of the county, creating a stop at Bay Springs, Mississippi, where a sawmill had been built in 1880.

In 1935-36 the first east-west road across the county was constructed between Bay Springs (west) and Rose Hill (in the east, just north of Paulding), which improved cross-county travel.