In the Chehalis River Valley and on the Chehalis River, this was a pleasant agricultural town with wide, quiet, tree-arched streets. D. F. Byles and his family, Elma’s first citizens, took a land donation claim in 1853 and were members of the first party of immigrants to come over Naches Pass. A short time later J. M. Anderson erected a store building, and other settlers from the Mississippi Valley arrived. Municipal government was established in 1886, and J. J. Carney (later postmaster at Aberdeen) was elected first mayor. The Chronicle, Elma’s first newspaper, was begun by Carney on May 25, 1889, and is still published.

Residents of Elma and the surrounding community relied on dairying, poultry raising, truck gardening, and bulb growing for their livelihood. The town was also a trading center for woodworkers and loggers in McCleary, Whites, and logging operations in the region.

Today, Elma is largely dependent on agriculture since the nearby Satsop Nuclear Power project was shut down. It was thought to be named for Miss Elma Austin, whose family settled in the vicinity before 1860, but two other name sources have been suggested: One is that the name is for Elmer E. Ellsworth, the first soldier to be killed in the Civil War, but with his given name shortened to the present form by post office officials. Another is that two residents of the town submitted the name Elmira when a post office was established, and that postal officials shortened the name to the present form because of an existing Almira in the state.