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Clayton, the county seat of Rabun County, traces its origins back to the early 19th century when the area was inhabited by the Cherokee Nation. Following the Treaty of 1819, European settlers began to arrive, drawn by the fertile valleys and abundant natural resources of the Appalachian foothills. The town was officially incorporated in 1823 and named after Judge Augustin S. Clayton, a prominent Georgia jurist. Its early economy revolved around subsistence farming, hunting, and small-scale trade with neighboring settlements.

Agriculture formed the backbone of Clayton's economy through much of the 19th century, with corn, apples, and livestock being common outputs. Timber harvesting became increasingly important as the surrounding forests provided valuable hardwoods, fueling both local industry and export. By the late 1800s, the development of small-scale milling operations supported the local economy, while the arrival of the Tallulah Falls Railroad in the early 20th century opened new markets and brought tourism to the scenic North Georgia mountains.

The arrival of the railroad in 1904 marked a turning point for Clayton. Improved accessibility allowed for a growing tourism industry centered on the area's stunning mountain views, hiking trails, and waterfalls. Paved roads and later U.S. Highway 441 connected Clayton to Atlanta and North Carolina, boosting commerce and making it a key stopover for travelers heading through the Blue Ridge Mountains.

Over time, Clayton developed a distinct small-town charm, blending Appalachian traditions with a growing arts and cultural scene. Annual festivals such as the Celebrate Clayton Art Festival and the Rabun County Music Festival draw both residents and visitors. The community is anchored by institutions like the Rabun County Historical Society and a variety of locally owned shops, galleries, and restaurants that celebrate the region's heritage.

Today, Clayton enjoys a reputation as both a vibrant mountain community and a gateway to outdoor adventure. Surrounded by the Chattahoochee National Forest and located near attractions like Black Rock Mountain State Park, it appeals to nature enthusiasts, retirees, and young families alike. With a strong sense of community, thriving local businesses, and convenient access to both Georgia and North Carolina destinations, Clayton remains one of the most desirable small towns in the North Georgia mountains.