Two years later, Robert Woods was granted 685 acres by the state of Virginia, with the area originally being part of Ohio County. Initially known as Paden Valley, the town remained primarily agricultural throughout the 1800s. However, significant development began around the turn of the 20th century, driven by Pittsburgh industrialist Thomas Watson.

Paden City’s strategic location along the Ohio River and the Baltimore & Ohio Railroad fueled its rapid growth. Early industries included the Paul Wissmach Glass Company, known for its cathedral glass, Duquesne Bottle Factory, Slider Brothers Cement Block Company, Euclid Manufacturing Company, Monongahela Iron and Steel Company, and Brown Lumber Company.

A notable business, Paden City Pottery, was founded by French potter John Lessel, who was drawn to the area for its clay deposits. Despite initial challenges, the pottery grew significantly, employing over 400 people at its peak. It became known for producing one of the first lines of ovenproof dinnerware and later fine china. However, by the 1950s, the company was unable to compete with lower-priced imports and ultimately closed.

Another key part of Paden City's industrial heritage is the Marble King factory, which has been producing glass marbles since it moved to the town from St. Marys in 1958. The factory currently produces a million marbles each day.

As of 2020, Paden City’s population was 2,550, a significant decline from its peak of 3,674 in 1970, when many of the town’s factories began to close. Despite these challenges, Paden City remains a town with a deep industrial legacy.