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The village was named for James Monroe, who was U.S. president at the time of its founding. Monroe's population was consistently low for a century and a half, and it remained a farming community, exporting hogs to other locations. The first high school was established in 1881, and it remained on the same site until the new building opened in 2004.

The Current Events Club was created in 1903 and still operates today. Monroe's population increased dramatically in the 1950s, jumping from 360 at the 1950 census to 2,193 10 years later. The population has been on the rise ever since. The village became a city in 1995, having attained a population of at least 5,000.

Monroe is home to a Lions Club, an Optimist Club, and the Highpoint Masonic Lodge. The Trader's World and Turtle Creek Flea Markets are tourist attractions, as well as a 62-foot sculpture of Jesus at the Solid Rock Church along I-75.