According to historians, Roundup was so named because ranchers found the valley near the Musselshell River a natural place to "round up" their cattle in the fall of the year. Some say it was named because it was the ending point of the Texas Trail cattle drives into Montana.

In the 1800's the valley was unsurveyed and mostly uninhabited. Much of the area was surveyed in 1882 and by 1900 a significant portion of the land was fenced according to rancher's holdings. Little open range was left.

Musselshell County was organized in 1911 and Roundup was named county seat. Publicity put out by the railroad and the availability of homestead land brought increasing numbers of people into the area. Many European immigrants came to claim land or to work in the coal mines, making Roundup a veritable "melting pot" of nationalities.

Coal mines near Roundup coupled with a strong farm and ranch economy, kept the city thriving in the early years. Montana's first oil well was discovered a few miles north of Roundup and a ensuing oil boom caused much activity in the area.