[2] Yalobusha is a Native American word, likely from the Muskogee language family, meaning "tadpole place.

"[3] This region was long a traditional homeland of bands of both the Choctaw and Chickasaw Indian tribes, who occupied lands in present-day Mississippi and Alabama.

The line as surveyed cut almost a perfect diagonal across the area of present-day Yalobusha County.

In 1830, the Choctaw ceded their Mississippi lands to the United States in the Treaty of Dancing Rabbit Creek.

It had been established in 1798 by John Henderson, a Presbyterian missionary, who was one of the first white (or European-American men) to settle in the area.

Other early settlements by whites included Elliot, Chocchuma, Tuscohoma, Pittsburg, Talahoma, Plummerville, Preston, Pharsalia, Sardinia, and Washington.

At its second meeting, the Board selected the site, naming it Coffeeville in honor of General John Coffee, who had represented the United States in treaty negotiations with the Choctaw and Chickasaw.

The same year, G. B. Ragsdale, an early settler in the northeastern part of the county, established a stagecoach stand near what is now Water Valley.

Three years later, the post office and stagecoach stand were moved to land owned by William Carr, and the name was changed to Water Valley.

James K. Polk of Tennessee, who served as president of the United States from 1845 to 1849, was a prominent early landowner in Yalobusha County.

The Illinois Central Railroad built a branch line from Jackson, Tennessee to Grenada, passing through Water Valley and Coffeeville, in the late 1850s.

Residents of the fledgling town of Water Valley offered to donate the needed land to the railroad.

After the shops were located there, Water Valley attracted workers and related businesses, and quickly became the largest town in the county.

After the war, the ICRR railroad shops were built at Water Valley, bringing a large influx of new workers and residents to the town.

[citation needed] Famed railroad engineer J. L. "Casey" Jones moved from Jackson, Tennessee to Water Valley in 1893.

The second judicial district offices were moved to the Water Valley City Hall, but within a month, it too burned.

Effects of the boll weevil and changes in mechanized agriculture reduced the number of workers needed.

In this period, many African Americans moved north to industrial cities in the Great Migration, to leave the violence and Jim Crow rules of the segregated South.

The following year, the ICRR began moving its railroad shops from Water Valley to Paducah, Kentucky.

At present, its two largest employers have a combined total of more than 2,000 employees, and several other industries provide hundreds of additional jobs for county residents.