Shelton was officially incorporated in 1890. The city was named after David Shelton, a delegate to the territorial legislature.^[7]

Shelton was once served by a small fleet of steamboats which was part of the Puget Sound Mosquito Fleet. These boats included the Old Settler, Irene, Willie, City of Shelton, Marian, Clara Brown, and S.G. Simpson.^[8] The economy was built around logging, farming, dairying and ranching as well as oyster cultivation.^[7] The Simpson Timber Companymill on Puget Sound's Oakland Bay dominated the landscape of the downtown area; the mill was sold to Sierra Pacific Industries in 2015, who are currently building a new mill.^[9] Shelton also identifies itself as the "Christmas Tree Capital".