In the early days, Waverly was known as the “Crossroads” where Henderson-Beaver Dam Road crossed the Madisonville Road. Perhaps the first settlers were John and Arthur Donnelly and their mother. The crossroads became known for Donnelly’s Store and later was known as Paynesville for Jack Payne.

The land surrounding the crossroads went on the sale block in 1869-1870. It was put on the market and sold by land agent Hugh McElroy. The area was renamed Waverly, evidently after McElroy’s nephew, Waverly Greathouse of New Orleans. A post office was established in 1902. A mining company was organized in 1904 and a coal mine operated until 1929.