The first settler in present-day Graham was Seaborn Hall, Jr., a farmer with extensive land holdings in the area, who opened a general store in 1866. Several years later when the railroad was completed through the county, another farmer and large landowner Middleton Graham donated the land for station Number 8 and the city of Graham, which was named in his honor.

Graham prospered in the late 19th and early 20th century, largely due to the successful naval stores and timber industry. Gum and rosin processed at Van Bokkelyn’s turpentine still in nearby Pine Grove were shipped out of Graham by rail, while Alexander Sessoms, also of North Carolina, ran a large naval store operation in Graham from 1879 to 1889.