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The town was officially formed after the railroad came through the area along the river. The railroad needed supplies and services as the trains stopped en route and the town grew up to serve those needs. When a post office was established in 1883, a name was needed. The Federal government named the town for 25-year-old James A Hardy, Jr., a subcontractor for the railroad. It is said young Hardy had saved his boss's life from a gang of angry railroad workers and in gratitude, the boss wrote Washington supporting the name "Hardy" for the community. The town was officially incorporated July 12, 1894.

In the roaring '20s and the Jazz-age '30s, Hardy became a popular summer resort for the wealthy of nearby Memphis, Tennessee. By 1930, the town held 508 permanent residents, but its visitor population swelled to 1,000 per day during the summer months. Many visitors built summer homes along the river's banks or on the tall bluffs while others built resorts, scouting camps, and church camps for visitors to escape the Memphis heat in the cool mountains. Later, many of these developments became the thriving communities in the Hardy area.

As the century progressed, visitors relied more on automobiles than trains to reach Hardy. Hardy was easily accessible for those who traveled by car because of its position at the intersection of highways 62 and 63 making it a regional tourism destination as it remains today.

Hardy retains the charm that has attracted visitors since it was founded. The downtown area is on the National Register of Historic Places and allows visitors a glimpse back in time with its collectibles, antique shops and local artisans.