The town was established in 1888 as a small settlement near the then-new Rock Island Railroad. The area has had several names, and prior to the settlement of the town, the location had been home to a general store and post office named Bowser after the owner's dog. When the town was founded, the town was named Malowe after Rock Island Railroad attorney M. A. Lowe. The town was later renamed after Henry Flagler, railroad builder and oil man, at the request of his daughter who liked the area.
The town was officially incorporated in 1916