Nässjö was for a long time only a rural village with agriculture as the dominant occupation. The turning point was the construction of the Swedish railway system. The southern main line railway, finished in 1864, passed through Nässjö. Later, other railways were inaugurated, whereby Nässjö, due to its geographical location in the country, became an important junction. A line to Katrineholm was opened in 1874, and that year also the opening of the Oskarshamn line; the one to Halmstad in 1882; to Kalmar in 1914.
As a result industries moved to Nässjö, and the population increased. The most important industries were wood industries due to the forest covered Småland province area, at a time when it had become possible to factory manufacture the wooden chair (a.k.a Windsor chair).Nässjö attempted to get a charter, which was granted in 1914, making it one of the now defunct Cities of Sweden. It is since 1971 instead the seat of the much larger Nässjö Municipality.

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