Established in 1901 with the opening of the Federal Coal and Coke Company coal mine, Grant Town was named after company vice president Robert Grant. The Federal No. 1 mine remained open for the next 84 years, until its closure in 1985, and at one point was the largest underground coal mine in the world in terms of gross production. Grant Town was incorporated in 1946. 

Folklore says the town is home to the Grant Town Goon, a Bigfoot-type creature, and various hauntings. Grant Town is also the setting of a number of the stories of the West Virginia ghost story anthology The Telltale Lilac Bush, by Fairmont State University professor Ruth Ann Musick. Natives of Grant Town include Charles Csuri, digital art pioneer; football coach Rich Rodriguez and Ziggy comic strip creator Tom Wilson. The town is the site of Grant Town Power Plant, an 80MW electrical generation facility.