McGrew was established in 1911 with the extension of the Union Pacific Railroad, growing during the 1920s to include stores, a post office, a railway depot, a grain elevator, a saloon, and a hotel. The origin of its name was not confirmed by any source found.

McGrew, population 75 in 2020, has seen most of its historic buildings fall into disuse since its post office closed in 1986; its 1912 Presbyterian church survives today as the Oregon Trail Chapel.