Eventually, two saloons sprung up, and a general store owned by J.L. Klinkenbeard. Medicine Bow as incorporated in 1909; its first mayor was August Grimm. In 1913, one of the grandest hotels in the state, The Hotel Virginian, was built, whose walls were decorated by cowboy artist C.M. Russell.

On November 8, 1919, a train stopped at the Medicine Bow station was held up by an escaped convict, William Carlisle. Carlisle escaped, but was eventually apprehended in the Laramie Mountains and was returned to prison.

One individual who made the residents of Medicine Bow proud was Owen Wister, author of The Virginian. In gathering information for his popular book, Wister rode the land of Two Bar Ranch to capture the feel of the area.

Native Americans used to come to the Medicine Bow River for the ash wood that grew on its banks, which was especially good for making bows. The Indian conception of the English word "medicine" had multiple meanings, which included healing, good luck, and quality. Thus, a "medicine bow" was one that would assure good hunting.