During the 1880s Milford became the railroad terminal for the Southern Utah Line, and it was particularly important as a loading place for the cattle of southern Utah. The railroad also enhanced Milford's importance as a supply station and the shipping center for local mines; it also facilitated trade with regional markets. Milford became the terminus for freighting activities for a region that included southern Utah, southern Nevada, and northern Arizona.

The railroad attempted three different times to extend rails from Milford to California. In 1881 work was begun on the roadbed but was quickly abandoned. In 1890 a second attempt was cut short by the national depression. The third attempt, in 1898, was successful and resulted in a line to Caliente, Nevada, by 1901. Milford was a valuable division terminal because of its excellent location and water facilities.

At the turn of the century, Milford had a population of 279, and in 1903 these inhabitants petitioned the county commission for incorporation. This facilitated both the codification of local ordinances and the unified planning for growth. Milford's Main Street was characterized by its simple frame architecture typical of mining towns. Saloons, boarding houses, and mercantile outfits lined both sides of the street. As might be expected, the town was plagued by fire and many structures burned to the ground from time to time.