The name „Pigeon Forge“ comes from an iron forge built by Isaac Love (1783–1854) sometime around 1820. The name of this forge referred to its location along the Little Pigeon River, in the vicinity of what is now the Old Mill. The name of the river comes from the flocks of passenger pigeons that frequented its banks at the time of the first Euro-American settlers’ arrival.
For centuries, the Cherokee used the valley where Pigeon Forge is now located as a hunting ground. A Cherokee footpath known as the „Indian Gap Trail“ crossed the Great Smokies from North Carolina, and passed through the Pigeon Forge valley en route to its junction with the Great Indian Warpath in modern Sevierville.
In the early 20th century, Pigeon Forge was an isolated mountain hamlet with no major roads. The nearest railroad station was in Sevierville. Bridges were also rare, the only major water crossings being a string of fords along the Little Pigeon.
When the Great Smoky Mountains National Park was opened in 1934, the Tennessee Valley Authority reported that there were no tourism-oriented businesses in Pigeon Forge. By the 1950s, improvements to US-441 led to the establishment of a few campgrounds and lodges, but little that would generate major revenue. During this period, however, two factors in nearby Gatlinburg would lead to the commercial boom Pigeon Forge would experience in the latter half of the 20th century.
The increasing number of tourist attractions brought competition for Silver Dollar City and its chief competitor in Pigeon Forge, Magic World, which had constructed a theme park on the slopes of Pine Mountain in the city’s south section. In 1985, the Herschends approached entertainer Dolly Parton (who was born in nearby Sevierville) with a proposal for a partnership in the promotion and operation of Silver Dollar City. After lengthy negotiations, Parton became a minority partner in the enterprise, and Silver Dollar City was renamed Dollywood to launch a major marketing campaign. The move proved successful as Dollywood continued expansion into the 21st century. Magic World folded in 1994.