Paducah, the county seat of Cottle County, is on a branch of Salt Creek 115 miles west of Wichita Falls and the same distance northeast of Lubbock in the central part of the county. The city is sometimes referred to as the "Crossroads of America" because U.S. highways 70 and 83, which run from the borders of the United States, intersect there. R. Potts, an early settler in the region, moved there from Paducah, Kentucky, in the mid-1800s and offered later arrivals free land in return for voting to name the new settlement Paducah and to make it the county seat.
When Cottle County was organized in 1892, Paducah officially became the county seat. A post office was established in the settlement in 1891 with Charles H. Scott as postmaster.
The Paducah Post was founded in 1893 and is still published weekly. By the early 1900s the town had a bank, a lumberyard, a telephone company, an Odd Fellows lodge, a school (started about 1893), and Methodist and Baptist churches. The 1903 population of Paducah was 151. The Quanah, Acme and Pacific Railroad arrived in Paducah on Christmas Day, 1909, and the town was incorporated the next year, when its population stood at 1,350. The number of residents grew to 1,800 in 1915 but dropped to 1,357 in 1920; it reached a peak of 2,952 in 1950, and afterward gradually declined. The 1980 census reported 2,216 residents and forty-eight businesses at Paducah. In the 1980s Paducah was a farm and ranch center; cotton, grains, alfalfa, and cattle were raised in its vicinity. Its hospital closed in 1985. The town's businesses during the 1980s included a gasoline manufacturing plant and a shipping point for the Burlington Northern line. Paducah still maintains a library and museum, an airport, and a retirement home. It also held an annual Cotton Festival each September and an Old Settler's Reunion each April. In 1990 the town's population was 1,788.