[12] Union general John T. Wilder, who in the 1850s had managed a foundry in Indiana, noted the iron ore and coal deposits of the Cumberland Plateau region while operating in the area during the Civil War.

After the war, Wilder and Ohio-born Knoxville Iron Company founder Hiram Chamberlain (1835–1916) purchased 900 acres (360 ha) at what is now Rockwood, selecting the location due to the ore and coal resources at the base of Walden Ridge, the proximity to the Tennessee River, and an assumption that the encroaching railroads would descend the Plateau at nearby Emory Gap.

Wilder and Chamberlain enlisted several other investors from Indiana and Ohio, and the Roane Iron Company was chartered on June 18, 1867.

[1] By late 1868, the company had constructed a blast furnace with a capacity of 15 tons per day between the ridge and the end of what is now Rockwood Street.

[13] The company mined coal and iron ore along the ridge, which it transported by narrow-gauge rail to the furnace site.

The pig iron was then shipped by river to rolling mills in Knoxville and Chattanooga, and was used primarily in railroad construction.

[1] Worried that the region's Confederate-sympathizers might shun an operation led by a well-known Union general, Wilder decided to name Roane Iron's company town after one of its lesser-known Indiana investors, William O. Rockwood.

In spite of the name, William Rockwood played only a minor role in Roane Iron's affairs, and the early development of the town was largely the work of Wilder and Chamberlain.

Wilder, a prohibitionist, banned alcoholic beverages on company property, and tried in vain to prevent drunkenness in the town throughout the 1870s.

Saloons became commonplace in Rockwood in the 1880s, however, and Roane Iron began to struggle with absenteeism, as many employees worked for just a few days per week in order to make enough money for a "weekend of drinking and fighting.

At the outbreak of World War II, however, the Tennessee Products Corporation reopened the iron works to produce ferromanganese for the wartime effort.

[1] Like other Roane County communities, Rockwood's economy was boosted by the government's construction of nearby Oak Ridge during World War II.