The origins of Kelsey go back to 1898. John Edgar—who had tried to settle in Mesa, Arizona, but had not succeeded—settled near Hopewell in Upshur County. In 1898, Edgar purchased land in what would become Kelsey.[2]
By 1901, there were nine Latter-day Saint families in Kelsey. On August 4, 1901, a Sunday School of the church was organized at Kelsey.[2] This same year, James G. Duffin, president of the Southwest States Mission of the church, received approval from the First Presidency for the building up of this settlement.[3] In 1902, Abraham O. Woodruff and Duffin laid out the townsite for Kelsey.[3]
A post office was established at Kelsey in 1902. By 1906, Kelsey had about 400 inhabitants.[3]
In 1907, the Kelsey School District was formed. In 1911, a two-story brick schoolhouse was built. The first gymnasium in East Texas, named Bennion Hall after mission president Samuel O. Bennion, was completed at Kelsey in 1929.[2]
By 1910 the population had risen to 527. In 1923, the population peaked at 750.[2] Families gathered to Kelsey from throughout the southern United States and even on rare occasions from other parts of the United States.
During the 1930s, Kelsey farmers provided food to the oil workers in Kilgore and Gladewater, Texas.[2] In 1943, the school in Kelsey was closed and after that students were bussed to Gilmer, Texas.[2] In 1951, a new church was built in Kelsey.[2]