Fort Fred Steele was established in 1868 to protect the North Platte River railroad crossing and the crews builting the Transcontinental Railroad. Named after Civil War hero Major Frederick Steele, the Fort and its soldiers provided vital services to local frontier settlements. These duties included law enforcement, pursuit of rustlers, control of labor unrest, and protective escorts of stagecoaches, mail carriers, and survey teams.
When the Fort was abandoned in 1886, a sparse population of civilians remained and established the community of Fort Steele. Over the next half century, the town became the focal point for a number of activities including wool production, timber milling, and ice cutting operations.