One of the frequently told stories about the naming of Flagstaff refers to a large pine, stripped of its branches, that was used to hang a U.S. flag for a Fourth of July celebration more than a century ago. As the story goes, the pine was so tall that people could see it from miles away. Flagstaff became a symbol, a landmark and, ultimately, a name. The inhabitants, sensing that the settlement would last after work crews finish up on the rail line and leave, named the town around 1881. Thomas F. McMillan, who set up his home in 1876 near a spring, is widely recognized as being the town's first permanent settler.
The spring and its small settlement underwent several names beginning with Antelope Spring, then Flagstaff, and then Old Town. By the time the Atlantic and Pacific Railroad (now the Santa Fe) came through in 1882 there were ten buildings in Old Town, but they soon moved closer to the new railroad depot. In no time at all, Old Town was almost deserted and when a post office was established near the new train depot, it assumed the name of Flagstaff. The railroad opened the area to the entire East. By 1886, Flagstaff was the biggest city on the main line between Albuquerque and the Pacific coast. The town developed other industries around rail: timber, sheep, cattle. Three brothers by the names of Michael, Tim, and Denis Riordan were some of the first to profit from the lumber when they formed the Arizona Lumber and Timber Company. Though Denis would soon move on to California, Michael and Tim would remain in the community making essential contributions to its development, including bringing electricity to Flagstaff and building nearby Lake Mary (eventually their home became the Riordan Mansion museum).
By 1891, Flagstaff had grown to 1,500 and Coconino County was established, leading to regional headquarters for other governmental offices such as the U.S. Forest Service. Flagstaff soon became the second-largest county seat in the United States.
Percival Lowell chose Flagstaff and its strong visibility to build his observatory in 1894. Town drew international attention in 1930 when the planet Pluto was discovered at the now-famed Lowell Observatory (a "must see" place in town).
The Arizona Teachers College began in 1899, becoming Northern Arizona University in 1966.
During the 1920s, Route 66 was built and passed through town, transforming Flagstaff into a popular tourist stop (Flagstaff celebrates Route 66 days in the beginning of September).