In 1850 this area, called the Glade, was a community of scattered farms with a racetrack and citizens sympathetic to emancipation. In 1853, rich and politically ambitious Cassius Clay gave Reverend John G. Fee a free tract of land in the Glade, where with local supporters and other abolitionist missionaries, Fee established a church, Berea College, and a tiny village. Fee named Berea after a biblical town where the people "received the Word with all readiness of mind."

Founded in 1855 with a college department in place by 1869, Berea College grew, and a community surrounding it quickly emerged. The college appointed a prudential committee to look after the affairs of the newly developed town. They laid out streets and sold lots, established a fire department, dug a public well, and subscribed to have the railroad and public roads come through the town. On April 4, 1890, the town incorporated and the affairs of town and college were separated.

In the 1890's, there was a growing national interest in the culture and tradition of Appalachia by writers, academics, missionaries, and teachers. Fascinated by the richness of traditional  but dismayed by the apparent isolation, poverty and depravation donors were very excited by the traditional coverlets brought by students in exchange for tuition, which College President William Frost took on his fund raising trips North. Frost, perceiving a national market for traditional crafts, established the first Berea College Fireside Industries. Frost encouraged people to move to Berea, and the college built a loom house and hired a supervisor to train and maintain the quality of student work.