Forrest City was founded in 1868 as a railroad stop. The Memphis and Little Rock Railroad ran through the city. The railroad's construction was in demand as contractors looked to revive the line. Former Confederate general Nathan Bedford Forrest obtained a railroad contract to lay railroad tracks. Nathan Bedford Forrest's commissary was the center of the town. Local businessman U. B. Izard proposed the town site to county surveyor John C. Hill, who mapped the site near the old commissary.
Forrest City had three banks, a fire department, a cotton compress, a cotton seed oil mill, and an ice factory. Its population declined by 3.2% between 2010 and 2020. In addition, the city had a public library, which opened in 1927. By the 1920s, women's clubs were founded in Forrest City, including the Cosmos Club, a popular movie and television show.
In Forrest City, AR, the median household income was $30,817, 0.271 times lower than the national average. The median household income was higher in Census Tract 9605, 9606, and 9604. The homeownership rate in Forrest City, AR is 42.6%, which is lower than the national average of 64.1%. A majority of Forrest City, AR residents are employed in transportation and office occupations.
The Forrest City area is home to the Forrest City Area Chamber of Commerce, a 100-year-old building. Forrest City's Red Cross relief camp, the largest in the state, provided basic necessities to 15,000 refugees. The town also suffered badly from the Great Depression and Drought of 1930-31. As a result, fifty percent of county farmers received government aid. The St. Francis River Bridge was completed on September 4, 1933, east of Forrest City.