After the Treaty of Paris was signed in February 1763, the British won rights to settle in West Florida without Indian interference. British land grands were given to people who took an oath of allegiance to King George. French settlers arrived on the banks of the Tchefuncte river in April of 1773. They made a living with tar, pitch and turpentine. The french settlers called their town Coquille (french for shells) which was abundant along the river and lake. In 1779, the news of Indian attacks in Mobile frightened the french settlers who packed their belonging and abandoned their homes along the Tchefuncte River.

The Tchefuncte River sat abandoned until April 24, 1783 when Jean Baptiste Baham (originally from Barsac France) arrived to settle on his 1000 arpents of land he received from a Spanish land grant. In 1811, the town was renamed Madisonville in honor of President James Madison. After the death of Jean Baptiste Baham, his five sons divided his land into lots. The town was later incorporated in 1817.