In the first half of the 19th century, the region was a hunting ground for Comanche, Ute, and Jicarilla Apache Indians. The first white settlement near Folsom was Madison, settled in 1864 and named for its founder, Madison Emery. In 1877, a post office was established. Madison became a ghost town in 1888 when the Colorado and Southern Railroad was completed and Folsom was established nearby on the railroad line. The train was held up three times near Folsom by Black Jack Ketchum and his gang. The final robbery in 1899 led to the capture and hanging of Ketchum.