This settlement was founded in 1869 as an Indian trading post by Col. James A. Coffey, serving the population across the border in what was then the Indian Territory. The town was stimulated in 1871 by being made a stop on the Leavenworth, Lawrence & Galveston Railroad, which connected it to other markets and developments. With the arrival of the railroad, a young surveyor, Napoleon B. Blanton, was dispatched to lay out the town. The naming of the town was left to the toss of a coin between Col. Coffey and U.S. Army Captain Blanton. Coffey won the toss and the town was officially named Coffeyville.
The city was first incorporated in 1872, but the charter was voided as illegal, and the city was re-incorporated in March 1873.
As a frontier settlement, Coffeyville had its share of violence. On October 5, 1892, four of the Dalton Gang were killed in a shootout during an attempted bank robbery;Emmett Dalton survived with 23 gunshot wounds and convicted at trial for his crimes. He served 14 years before being pardoned. The gang had been trying to rob the First National and Condon banks, located across the street from each other. Residents recognized them under their disguises of fake beards and attacked the gang members as they fled one of the banks. Four citizens, including a U.S. marshal, Charles T. Connelly, died defending the town. The town holds an annual celebration each October to commemorate the Dalton Raid and the citizens who were lost
After the discovery of its resources of plentiful natural gas and abundant clay, Coffeyville enjoyed rapid growth from 1890 to 1910, as its population expanded sixfold. From the turn of the 20th century to the 1930s, it was one of the largest glass and brick manufacturing centers in the nation. During this same period, the development of oil production attracted the founding of several oil field equipment manufacturers, and more workers and residents.
Coffeyville industrialist Douglas Brown founded Coffeyville Multiscope, which produced components of the Norden bombsight. This played a determining role in the perfection of precision daylight bombing during World War II as a result of the bombsight's advanced accuracy and drift correction capability.