The town of Shelby was Named for the county, which was named for Revolutionary War Gen. Isaac Shelby. The City was founded as a railroad town in 1870 and soon became a bustling community in the fertile farmland between the Nishnabotna River and Mosquito Creek. The Rock Island Railroad left the town in the 50's and 60's when it constructed a short-cut from Council Bluffs and Atlantic that saved 17 miles of winding route. Part of that route has been converted to a nature trail, crossing over Stone Arch, a landmark just east of Shelby.

In the 1970's a new transportation link was built that has been a key factor in the economic health and well-being of the community. Interstate 80 that connects both coasts of the United States passes right by Shelby and is a vital connection to the nation.

In recent years, Shelby has become a host to visitors from all over the world. Several landmarks give the community a distinctive character such as: a 76-foot tall Agricultural Symbol, a tribute to agriculture, is located in a park featuring prairie grass and wildflowers. The park has become a favorite rest stop of travelers. Downtown, an Antique Coke sign restored in 1986 from original 1932 vintage adorns the side of a local business. Shelby is the boyhood home of Clyde Williams, an All American athlete. Nearby you can visit Carsten's Farm, a demonstration farm of 1880's era. Shelby has become the Purple Martin Capital of Iowa in an effort to use ecologically sound ways to control mosquitoes. Over fifty martin houses in the community establish this title.

An active main street and essential rural trade have replaced the railroad economy of the past. The City of Shelby is set in the picturesque farmland of Southwest Iowa.