Sherman is located at the point where four townships meet and portions lie within each of the townships. It is at the northwest corner of Antioch Township, the southwest corner of Hanover Township, the southeast corner of Wexford Township, and the northeast corner of Springville Township. It is situated on M-37 near where it crosses the Manistee River, just a couple miles northeast of the village of Mesick.
The first known permanent white settler in the county, B. W. Hall, settled near Sherman in the early 1860s. A store was opened in 1867 and was at first known as Manistee Bridge because of proximity to the bridge over the Manistee River on the Newaygo and Northport State Road (built in 1857 and is approximately the route of present-day M-37 in the county) which connected Newaygo to the south with Northport on the Leelanau Peninsula to the north. The road opened the area for settlement, as it was previously practically inaccessible. The settlement gained a post office in 1868 named Sherman, after the Civil War General William T. Sherman. Sherman was platted in 1869 and incorporated as a village in 1887. Fires destroyed the business district and the village disincorporated sometime in the 1920s.