In 1869 Robert Patton bought some land and called the area Methven after his home town in Perthshire, Scotland. The site for the township was at the junction of six main roads. In 1878 sections in the town were auctioned. In 1880 Patton opened a hotel and sold some land for a blacksmith's shop. John Grigg of Longbeach had a hut in the area as a stopping place for drovers driving cattle from Longbeach to the West Coast.
In 1878 work began on the inland branch railway linking Methven with Rakaia. It was opened in 1880 and operated until 1976.
Methven was the closest town to Mt Hutt sheep station which had been established in 1853.