The Gulf, Colorado and Santa Fe Railway laid tracks a half mile north of the original townsite in 1886.

The businesses of Nickelville moved to take advantage of the railroad within the following year, and the City of Wylie was incorporated in 1887 along the right-of-way.

Colonel William D. Wylie, a right-of-way agent for the railroad[6] and Civil War veteran.

That same year, Wylie had given itself its name, established a post office branch, and incorporated, choosing an alderman form of government.

Unlike many rural Texas communities, Wylie grew during the Great Depression years, reaching 914 residents by 1940.

In part, this was a result of increased dairy farming to meet the demands of nearby Dallas.

Designed to provide water for towns in four counties, the construction of the Lavon Dam and Reservoir 5 miles (8 km) north of town, and the selection of Wylie to house the offices of the North Texas Municipal Water District, pushed the population to 1,804 in 1960.

[12] Wylie is part of the subtropical region, with hot, dry summers and cold, mild, rainy winters.

Wylie has a council-manager form of government, composed of a mayor and six council members[21] (elected at large) along with an appointed city manager.

The city of Wylie is a voluntary member of the North Central Texas Council of Governments association, the purpose of which is to coordinate individual and collective local governments and facilitate regional solutions, eliminate unnecessary duplication, and enable joint decisions.

Collin College opened its new Wylie campus in August 2020 that can service up to 7,500 students at full capacity.