The third-largest city in Whitman County, this was the commercial hub of the North Palouse River valley. The stream, which runs through the center of the town, is bordered by several blocks of one-story and two-story business buildings, and warehouses, industrial plants, and the railroad tracks. Wide paved streets lead to pleasant residential districts on the slopes of the hills that crowd down upon the town.
In the course of its existence, Palouse has had a varied history. When Modoc Smith settled here in 1875 he found a well-defined trail running from the fertile valley, called Our Home by the Palouse Native Americans, eastward to the forested mountains of Idaho, where the natives went on hunting, fishing, and berry-picking expeditions. Among the early settlers were some of the Quantrell bands, outlaws who were active in Missouri and other border states during the Civil War. Later, when settlers began to come into the country in increasing numbers and mining in Idaho began to boom, Palouse became a stage stop and outfitting point. In the 1880s a flour mill and several sawmills were operating, and logs were floated down the river from the heavily forested Idaho mountains a few miles to the east. Later Palouse had several pea-processing and canning plants.