Levy County was created in 1845, after the Seminole Wars. It was named for David Levy, a planter elected in 1841 as the state's territorial delegate to the US House of Representatives, where he served two terms. When Florida was admitted as a state, Levy was elected by the new state legislature as one of Florida's first two U.S. senators; he served from 1845 to 1851, and again from 1855 to 1861. He was the first Jewish American elected to the United States Senate.
Levy provided for long-term development in the state by constructing the first railroad across Florida, the Florida Railroad, linking the deep-water ports of Fernandina (Port of Fernandina) on the Atlantic Ocean and Cedar Key on the Gulf of Mexico. He developed a network of feeder railroads through central Florida as well. For his efforts, he was called "the father of Florida railroads."
The Rosewood Massacre occurred in Levy County in the first week of January 1923. It was a race riot in which whites from the nearby town of Sumner, reacting to the alleged rape of a white woman by a black man, burned the predominantly black town of Rosewood to the ground and killed several blacks. A film based on the incident was made in 1997, but was not filmed in Levy County.