The community was named by and for Israel F. Eddy, who was postmaster here in 1888. The post office, originally established in 1868, had been called "Little Elk", for the nearby creek, until Eddy moved it further from the creek and renamed it. Subsequent back-and-forth moves and name changes through 1900 resulted in a post office near the mouth of the creek but with the name "Eddyville".[6]
In the late 19th century, Eddyville was one of the stops on the Oregon Pacific Railroad, linking the former port city of Yaquina to Corvallis and Albany.[7] After the Oregon Pacific failed financially, fell into receivership, and went through 17 years of financial and legal complications, it became a branch line of the Southern Pacific in 1907.[8]