A trading post was established at Elwood in 1852, in the area known as Roseport. In 1856, the site was sold and the town of Elwood, named for John B. Elwood, a pioneer settler, was then laid out.
In its heyday scores of river steamboats unloaded passengers and freight at its wharves and every 15 minutes ferry boats crossed to its Missouri rival, St. Joseph. During the 1850s thousands of emigrants outfitted here for Oregon and California. Late in 1859, Abraham Lincoln, seeking the Republican nomination, here first set foot in Kansas, and spoke in the three-story Great Western Hotel. Elwood was the first Kansas station on the Pony Express between Missouri and California. Construction of the first railroad west of the Missouri River begn here in 1859. On April 23, 1860, the first locomotive, "The Albany," was ferried over and pulled up the bank by hand. Elwood's ambitions for greatness were thwarted, not by St. Joe, but by the river, which undermined the banks and washed much of the old town away.