The area's first community was Caddo Grove, two miles west of present day Joshua. It was a self-sufficient town until the railroad (Gulf, Colorado and Santa Fe) laid tracks between Cleburne and Fort Worth. Joshua (named after the biblical character) was platted in 1880 and organized with the arrival of the railroad in 1881. The first store (containing the post office) opened the following year. Caddo Grove's post office closed soon after.
By 1890 Joshua was thriving with a respectable 300 citizens, two steam mills which doubled as cotton gins, a hotel, and a newspaper. A one-room school opened in 1890 and in 1899 a larger school was built which became the high school in 1917.
The town suffered fires in 1900 and 1912, but still managed to thrive. In 1906 a public water system was installed and gardens and orchards sprang up around the community. The Fort Worth South Traction Line (interurban service) connected Cleburne with Fort Worth and in 1912 Joshua became a stop.