The town is named for Samuel Shannon, who purchased land at that location from Chickasaw Chief Itawamba in the early 1800s, then built a cabin and a farm.

More settlers arrived following the Treaty of Pontotoc, which ceding Chickasaw land in exchange for financial compensation.

[4] The original townsite was north of the present location, and was moved when the Mobile and Ohio Railroad was constructed through the community in the 1850s.

[4] On April 29, 1963 A powerful and devastating F4 Tornado[6] struck the center Destroying 27 structures killing 3 and injuring 20 more.

[8] A message on the town's website reads: "we take pride in being on the quiet side of county with our relaxed country living where traditions of family, faith, and brotherly love make up who we are today.

[10] According to the United States Census Bureau, the town has a total area of 4.1 square miles (11 km2), all land.

In 2005, General Atomics opened a $38 million manufacturing and test facility in Shannon.

Much of the work at the facility is for the U.S. Navy, including advanced launch and recovery systems for aircraft carriers.