As Savannah grew, Apalachicola declined. Although 133,079 bales of cotton were shipped in 1860 from Apalachicola, the decline was in evidence in the percentage of the upriver cotton crop shipped.

The destruction of Southern railroads during the war and the cypress milling boom of the 1880's were enough to keep steamboats on the river up through the 1927s. As the Apalachicola River could not float towing barges year around, the use of the river declined after that. In 1877, Oliver Hudson Kelley, founder in 1867 of the Patrons of Husbandry known as the National Grange, an economic, political, and social force among Midwest farmers, bought almost 2000 acres of land in Franklin County and started the community of Rio Carrabelle. Kelley, with this wife and four daughters, lived in his Island House hotel managed by his niece, Carolyn Arrabelle Hall, known as Carrie, for whom Carrabelle was named.

The Crooked River lighthouse is often called the Carrabelle lighthouse. The swamp area northwest of Carrabelle has the name Tate's Hell from a legendary, frightened, lost traveler of the 1880's, Cebe Tate. Charles M. Harrison opened a sawmill in the late 1860's.

Other mill owners, including Snow, Richards, and Harris followed. In the early 1870's, A B. Tripler founded the Pennsylvania Tie Company. Renamed the Cypress Lumber Company in 1882, it had headquarters in Maine and was directed locally by August S. Mohr. Its lumber mill operations in Apalachicola were to become the largest in the South. James N. Coombs from Maine, a Union veteran and a Republican, came to Apalachicola in 1876. Expanding his local store to include a sawmill, he went into association with Caleb Emlen from Chester, Pennsylvania, and established a lumbering partnership with Seth N. Kimball of Mobile.

Purchasing a lumbering operation in recently founded Carrabelle. he obtained another partner in Charles H. Parlin. Maine born Charles Parlin married Elizabeth Grady, daughter of a ship chandlery family in Apalachicola, and became owner of the Long Lumber Pine and Cypress Company. Moving his family 22 miles east to Carrabelle, Parlin managed his and Coombs' newly-acquired Franklin County Lumber Company. In Apalachicola, Coombs sold out to Kimball in 1888 and set up his own firm, Coombs and Company, acquiring single control of the Franklin County Lumber Company.

He had become the single most important business man in Franklin County's lumber industry. Henry Brash, who had come as a Jewish emigrant from Germany in 1865, entered, over time, the dry goods, lumber, real estate, and sponge trade and took over Harrison's mill. Brash later sold the mill to the Cypress Lumber Company.

Hewn logs were exported to Europe and South America, railroad ties to Mexico, and sawn pine lumber and shingles were sent north, while businesses in New Orleans were the major purchasers of cypress. From 1878 to 1888 lumber was shipped through West Pass. C. L. Storrs and R. F. Fowler operated a sawmill in Carrabelle, and by 1890, Carrabelle was also the center of an expanding naval stores industry. Family turpentine stills could be found about the county until the 1940 's .

Although there were exceptions, to teach a negro to read and write was either illegal or regarded as unhealthy throughout most of the South before the American Civil War. However, school work was successfully undertaken by some of the blacks with the help of several white children who attended schools training business clerks.

During and after Reconstruction, several black churches were established, and by 1880, the blacks ran a number of businesses, including the two leading hotels in Apalachicola, The Jenkins and The Fuller. A prominent African American of the Day was Emmanuel Smith, who served as Postmaster, leaving the position on his retirement to Dr. Chapman.

Eastpoint was established in 1898 as an experimental, cooperative colony by a Quaker family named Brown, as a result of a combined economic, religious, and political effort known as the Populists. They were joined by Henry Vrooman, a Congregational minister and Harvard graduate, and brother of the founder of Ruskin Hall (a workingman's college at Oxford University, England).

The John Gorrie bridge across Apalachicola Bay between Eastpoint and Apalachicola was completed in 1935, replacing a ferry service. By 1920, the great stands of slow-growing cypress that had sustained the area's lumber industry had become significantly depleted.