What is now called Assumption was once called Tacusah. Around 1840-50, a stagecoach road from Springfield to Terre Haute stopped at the "Halfway House", some five miles East of Assumption in Rural Township, near the Potter farms. This house was occupied—within the memory of many now living—by the Heber Keirn family. In 1840 the need of a railroad became acute, as produce and supplies had to be hauled long distances by wagon. Stock was driven as far as St. Louis to market. Until the building of the railroad, the town had few settlers.
A few adventurers had disposed of the deer and wolves and driven the Indians North and West-ward. Life in the fifties and sixties was primitive. Winters were long, log cabins poorly heated. In December 1856, there came to Tacusah a remarkable man, Elisee E. Malhiot. With him came his brother Francis. He wished to found a Canadian colony of his friends and relatives, so he induced 150 men, women, and children from his early home to come to his settlement. He gave the name Assumption to his venture, in honor of his former Louisiana Parish. Among the people from Canada were many mechanics and farmers. Soon, thirty or more houses were built.
In 1858 Colonel Malhiot erected a large flour mill. He brought sugar from his Louisiana plantation and sold it at wholesale prices to his neighbors. Marcus L. Barrett from Massachusetts was another factor in the town's growth. He first conducted a boarding house for men working on the railroad. In 1902, the village was incorporated as the City of Assumption.