The Fremont, Elkhorn, and Missouri Valley Railroad extended its line north from Rapid City in 1887, making Whitewood the end of the line. The railroad bypassed well-established Crook City.
Many who bought Whitewood lots were Crook City residents ready to abandon the older town in hopes of finding business profits stemming from rail service. Whitewood remained the line's end for three years and prospered as a shipping point for locally produced livestock, wool, fruit, and milled grain.
That activity slowed after the railroad extended lines to Deadwood and Belle Fourche in 1890, according to author Rick Mills. Still, train service remained key to development into the 20th century. Later in the 20th century lumber processing and livestock feed production emerged as important industries.
According to the 2010 Census, Whitewood had 927 residents, 374 households and 232 families.