The first permanent settlement at Montello was made in 1869. The town of Montello was established in 1904 as a "division point" (operations base) for the Southern Pacific Railroad. Montello's development was prompted by the construction of the Lucin Cutoff across the Great Salt Lake in Utah, a line that bypassed the area's former division point town of Terrace, Utah. Many of the original houses in Montello were moved there from Terrace and nearby Kelton, Utah. Montello was originally named "Bauvard", and received its current name in 1912. The word Montello is Italian for "little mountain" and was probably given by one of the early Italian settlers.
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