Nephi was known for some years as Salt Creek. However, early church records refer to it as the Nephi Branch and some government records also called it Nephi. Until 22 May 1882 mail to the town was addressed to the Salt Creek post office. Nephi was incorporated in 1889, and on 16 January 1882 an act by the governor and the legislature of the territory was approved, making Nephi the county seat of Juab County.

Agriculture was the first industry. Farming and livestock have always been important in the Nephi area. The settlers traced the source of the salt in the creek to a cave in the canyon east of town and they then began to mine it. This soon became a flourishing local industry, with salt traded to people as far away as St. George in exchange for food and clothing. In 1893 the Nebo Salt Manufacturing Company was organized. However, it eventually became unprofitable to compete with the larger companies on the shores of the Great Salt Lake, and 1925 marked the end of the local industry.