[7] Waverly was established by Steven Pavatt as a stop along the stagecoach road between Nashville and Memphis in the early 19th century.

The Union troops managed to build a fort at the courthouse square, although they were constantly harassed by Confederate guerillas.

On November 4, 1864, Confederate troops under Nathan Bedford Forrest attacked and destroyed the Federal depot in what became known as the Battle of Johnsonville.

The explosion, which killed 16 people, led to an overhaul of the methods used by the Tennessee Emergency Management Agency when responding to hazardous material spills.

[9] It also led to various strengthened standards and regulations (e.g., for design and construction of rail cars) by the National Transportation Safety Board.

[10] During the morning of August 21, 2021, very heavy rainfall and totals of over 17 inches (43 cm) caused Trace Creek to overflow in the middle of town, leading to catastrophic flooding in Waverly.

Floodwaters impacted many homes and businesses, electric, telephone, and water services, churches, and Waverly Elementary School.

The low ridges that "wall in" Waverly to the north and south represent the fringe of the western section of the Highland Rim.