Postal service was established in Knierim on December 26, 1899, shortly after the town was established. The town was established from lots sold by farmer William Knierim when the Illinois Central Railroad was built in the area. Within two years, town boasted a number of businesses, including a bank, two drugstores, two lumberyards, a hotel, an opera house and a grade school.

Official population peaked at 220 residents in 1910, with growth set back significantly in 1920 when a fire destroyed the entire main street business district. Population now stands at 60; the post office is open four hours each weekday.