Castlewood was platted in 1881, and in 1882 the Chicago and Northwestern railroad built a branch line through the Big Sioux Valley with the turntable at Castlewood.
It was said that the first train passing through what is now known as Castlewood, was a man named Castle who was the engineer, and the conductor was a man named Wood.
The town is situated in the center of one of the richest agricultural sections of northeastern Hamlin County.
Castlewood Community Museum
The Castlewood Historical Society is happy to have found a home for its museum in the M.O. Hanson building. A successful fund drive and a grant from the city of Castlewood provided funds to purchase the building.
The museum is open by appointment during the winter months. This will continue to be a community effort, and items depicting local heritage are sought.