A number of exploring parties had traveled through Beaver Valley before anyone seriously looked at it as a potential location for settlement. In the winter of 1856, George A. Smith, a Mormon apostle and a representative to the territorial legislature from Parowan, noted that the area could potentially provide good pasturage for cattle. Nearby canyons also had abundant timber for lumber and available water for a mill. That same month, February, a colonization party arrived in the Beaver River Valley, leaving their homes in Parowan thirty-five miles to the south. The settlers included Simeon F. Howd, captain; Wilson G. Nowers, James P. Anderson, Edward W. Thompson, Ross R. Rogers, H.S. Alexander, John M. Davis, Charles Carter, John Henderson, Barney Carter, James Duke, John Knowles, Joseph Goff, James Low, Benson Lewis, and their families. The next month, George A. Smith arrived to appoint Simeon F. Howd as the presiding elder, the senior religious leader of the group.

The initial land division consisted of sixteen ten-acre lots. By May, water for irrigation had been directed from the river to the east and conducted in a newly constructed ditch to the northeast corner of the survey, crossing the public square on a diagonal. Soon, modest wood frame homes and a wooden fence around the entire surveyed area, with a wooden schoolhouse in the center of town, marked the fledgling community as a place where people had come to stay. Beaver was formally incorporated on 10 January 1867.