Payson considers its founding year as 1882, at which time it was known as "Green Valley". On March 3, 1884, a post office was established with the help of Illinois Representative Lewis E. Payson. The first postmaster was Frank C. Hise. In honor of Representative Payson's help, the town's name was changed to "Payson".
Payson had its first rodeo in 1884. Payson considers its rodeo the "world's oldest continuous", as it has been held every year since.
In 1918 author Zane Grey made his first trip to the area surrounding Payson. He would come back with regularity through 1929, and would purchase two plots of land near Tonto Creek, including 120 acres (49 ha) from Sampson Elam Boles under Myrtle Point. Grey wrote numerous books about the area and also filmed some movies, such as To the Last Man, in the Payson area in the 1920s.
During Prohibition the manufacture, sale, and distribution of liquor was plentiful. The transactions took place on historic Bootleg Alley.
During the 1930s an effort began to try to get Payson a better road to connect it to the outside world. At that time Payson was very isolated, with a trip from Phoenix to Payson taking eight to twelve hours. Throughout the 1950s work on a paved road from Phoenix to Payson progressed, and the paving was completed in 1958. A few years ago this highway, State Route 87 (also known as the "Beeline Highway"), was expanded to four lanes.
Payson Area Climate
Owing to its elevation of almost 5,000 feet (1,500 m), Payson has what is classified as a Mediterranean climate (Köppen Csa), though atypical for this climate with its early-summer drought and late-summer rainfall. Whilst average temperatures do reach the high 80s to mid 90s in summer, the town's altitude usually keeps it protected from the 100+ temperatures often found at Arizona's lower elevations. Monsoon storms often develop in the later afternoon, bring heavy rainfall to the area and also lower the temperature a bit. Summer nights cool down into the 50s.
Winter is also mild, with cold nights. January's average nighttime low is 25° with some nights in the teens, but by mid-afternoon, the temperature has usually risen into the 50s. There are only a few days of real winter, with 23.3 inches (0.59 m) of annual snowfall, but very little snow cover. The weather in Payson is as varied as the landscape, and a snowstorm is often followed by weather so warm that any accumulation melts away within a day or two. In spring the desert blooms with a fiery array of Indian paintbrush, primrose, and the golds and fuchsias of cactus blossoms and other brightly-colored wildflowers. In this mild climate, neither summer nor winter are "indoor" seasons.
On Monday, November 5, 2001, between about 8pm and 10:30pm, Payson was treated to a rare display of the Northern Lights. It is extremely rare and only happens during solar flares because Payson is so far south. The lights appeared in a red color.