Germantown was founded along the Cherokee Trace on a ridge between the Wolf River and Nonconnah Creek, about 16 miles east of the Mississippi River.
The first white settlers arrived in Germantown about 1825. Between 1825 and 1830, Miss Frances Wright established Nashoba Plantation, a utopian community intended to emancipate slaves. By 1830,the first store was opened as more settlers moved into the area.
The community became known as Pea Ridge in 1833, town lots were laid out in 1834 by surveyor N. T. German and the name was changed to Germantown in 1836, reflecting the presence of German families.