Estelline was established in 1892 by the brothers Elam and Math Wright. It was on the Fort Worth and Denver City Railway and was named for Estelle de Shields, daughter of an early settler. The area was originally part of the Diamond Tail Ranch. The Mill Iron range lay nearby, and after 1896 the Continental Land and Cattle Company moved its headquarters to a nearby bluff overlooking the Red River. A post office was opened in May 1892, and by 1894 Estelline had two hotels, a Methodist church, a cotton gin, a livery stable, and a one-room schoolhouse. Tom Macy opened the first store, and soon afterward T. R. Garrott established the Estelline Supply Company. In 1894 Math Wright obtained a depot and sidetrack for his town, and throughout the remainder of the decade Estelline was an important shipping point on the Fort Worth and Denver City line. Cattle from nearby Silverton and Paducah were driven there for shipment. In 1896 the Mill Iron Ranch bought the Estelline Supply Company and opened a large general merchandise store and lumberyard with R. L. Biggerstaff as manager. Two years later Biggerstaff established a private bank, which became the Estelline State Bank in 1905. The town had two newspapers, the Estelline Star (1894–1896) and the Estelline News (1907–1910). A two-story school was built in 1909. In 1912 the citizens of Estelline elected to incorporate with a mayor, a city marshal, and five aldermen. By then the town had attained a population of over 1,000.
