First settlement of Grainger County was begun about 1785, along the valley south of Clinch Mountain, at the head of Flat Creek. Some of the first settlers were some who had resided originally in what is still Hawkins county. A prominent pioneer, James Ore, located at a place known as Oresville, about one mile east of Bean Station, near the close of the 18th century.
The act creating Grainger County was passed on April 22, 1796, and the boundaries were described as follows: "Beginning on the main road leading from Bull's Gap to Hayne's Iron Works, on Mosey Creek, at the house of 'Felps' Read,; running a course to the Kentucky road on the north side of Holston River, then north fifty degrees west to the Virginia line, then west with said line to a point northwest of the end of Clinch Mountain, and to a ridge dividing Richland and Flat Creeks to Holston River at the upper end of the first bluff above Boyles' old place, then up the course of the river to the mouth of Panther Creek to near the houme of John Evans.
The county court was organized on June 13, 1796 at the home of Benjamin McCarty, who lived approximately 2 miles below Rutledge. The magistrates present at this first court were ThomasHenderson, Elijah Chisum, James Blair, John Estes, Phelps Read, Benjamin McCarty, James Moore, John Bowen, John Kidwell, John Sims, William Thompson and Major Lea. This group elected the following officers:
The Constables appointed were:
The location of the seat of justice caused much difficulty, and was not permanently settled until 1801, in Rutledge. Meanwhile the court was held at various places: John Bunch's, Martin Asburns', Mitchell's Spring, and occasionally at a place on the north side of Clinch Mountain. The first courthouse was completed in 1801, near the site of the present courthouse, and was erected by Francis Mayberry.
In 1830 the population of Rutledge was given as 150, and it was made up of one school, one church, three stores, two taverns, two hatters, two blacksmiths, one saddler, and two tanners.
The county academy, known as Madison Academy, was in operation about 1842, and the first building stood on a bluff south of the town. In 1865, a new two-story frame building was erected on a lot just east of the town.