Dillon was born with the screech of a steam whistle. The Utah and Northern Railroad (present-day Union Pacific) was forging north, toward Butte in 1880, as winter converged the railroad halted construction at Richard Deason’s ranch. The location of the town was determined coincidentally when the rancher owning the land refused the railroad passage. Some enterprising businessmen traveling by train bought the ranch to form a townsite company. During the winter the railroad remained at the end of the track and when it moved north again in the spring, the town remained.
Dillon was named after the president of the Union Pacific Railroad, Sidney Dillon.
With a population of about 4,000, Dillon is an agricultural community and the regional trade center for southwestern Montana. At one point it was the largest wool shipping point in Montana. It is also the county seat of Beaverhead County and boasts an "Entrance to Montana" Visitors Information Center located in the old Union Pacific Depot Building alongside the Chamber of Commerce. Western Montana College, built here in the early 1900s, has assisted Dillon’s economic stability and development.
Nestled within the surrounding mountain ranges of the Beaverhead, the Tendoys, the Centennial Range and the Pioneer Mountains, Dillon enjoys a pocket of mild weather and a variety of geographical splendor.