Listowel's original name was Mapleton, and was changed when the post office was established. It was chosen by a government official and refers to a town by the same name in County Kerry in southwestern Ireland.
The first permanent settler, John Binning, arrived in the area in 1857. In 1871 the Wellington, Grey and Bruce Railway extended its line to Listowel. It was joined in 1873 by a second railway, the Stratford and Huron Railway, and Listowel soon became an important shipping point. The population doubled when industries, including a woollen mill, a sawmill, a planing mill and a tannery, were established. In 1891, the Morris, Field, Rogers Company Ltd began to manufacture Morris pianos in Listowel.