When the railroads arrived in the valley in the late 1880s, the name was changed to "Unicoi City," and later shortened to its current form.

The town developed in the early 20th century as a shipping point for area mining and logging operations.

[7][8] In 1994, the municipal government of Johnson City would purchase the Buffalo Valley Golf Course located in upper Unicoi County for $1.52 million.

As a result, a community group gathered to incorporate Unicoi into a town by public referendum vote the following year to prevent potential annexation.

[11] The town is situated in the North Indian Creek Valley (known locally as "The Valley Beautiful"), at a point where North Indian Creek emerges from the mountains to the southeast and bends to the southwest toward Erwin and its eventual confluence with the Nolichucky River.

Tennessee State Route 107 connects Unicoi with Erwin to the southwest and the rural Limestone Cove area to the east.

According to the United States Census Bureau, the town has a total area of 16.3 square miles (42 km2), all of it land.

As of the 2020 United States census, there were 3,833 people, 1,421 households, and 909 families residing in the town.