Initially, the area was known as "Rhodes Ferry Landing", named for Dr. Henry W. Rhodes, an early landowner who operated a ferry that crossed the Tennessee River in the 1810s at the present-day location of Rhodes Ferry Park. The city was incorporated as Decatur in 1821. It was named in honor of Stephen Decatur; after he was killed in a duel in 1820, President Monroe directed that the Alabama town be named for him.
In the early 1830s, Decatur was the eastern terminus of the Tuscumbia, Courtland and Decatur Railroad, the first railway built west of the Appalachian Mountains. In 1850, the Tuscumbia, Courtland and Decatur was incorporated into the Memphis & Charleston Railroad.
Because of its location on the Tennessee River at the strategically important crossing of two major railroads, Decatur was the site of several encounters during the American Civil War. When the Union Army occupied the city early in the war, the commanding general ordered all but four buildings in the town to be destroyed. Bricks from some of the churches in town were used to build stoves and chimneys for the buildings that housed soldiers. Three of the buildings that remained are still standing - the Old State Bank, the Dancy-Polk House, and the Burleson-Hinds-McEntire House. After the Union victory in the Battle of Atlanta, a Confederate army under the command of General John Bell Hood briefly sparred with a vastly outmanned garrison during the 1864 Battle of Decatur, when the city was referred to as "A Tough Nut to Crack."
While the city was under Confederate control, plans for the Battle of Shiloh were mapped out within the Burleson-Hinds-McEntire House. These activities make the house one of the most historic buildings in Decatur.