Midway was the first town in Kentucky founded by a railroad. The first lot was sold in 1835. The business section developed along Railroad Street, and by 1900 hotels, saloons, a large distillery, dry goods and grocery stores, many trades, churches and schools appeared.

Col. John Francisco eventually purchased property here which figured into the coming of the railroad. The Lexington and Ohio Railroad was incorporated in 1830 at Lexington, the second oldest railroad west of the Alleghenies, and opened in 1832, with the cars pulled by horses. A steam locomotive was in use by 1833, built by Thomas Barlow, the year the company purchased a right of passage through the middle of Francisco’s farm, the site of Midway. But when construction began, Mr. Francisco became angry with the railroad for unreasonably damaging his property and, in 1835, the company purchased his 216 acre farm. Railroad executives decided to lay out a town called Middleway, soon renamed Midway, since it was both halfway between Lexington and Frankfort and halfway between a potential line from Georgetown and Versailles.