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The Shoshone Indians were the first inhabitants of the area. The first Euro-American settler, Tilford Kutch, arrived in 1869. In 1873, he opened a trading post and ran a ferry across Smiths Fork. After the arrival of the railroad in 1882, the town grew, and was incorporated in 1910.

The town was named for the coal found in the area. Following the railroad, sheep ranching became more popular, reaching its peak in 1918, when Cokeville was informally called the “Sheep Capital of the World”.