A railroad worker, perhaps homesick for his hometown in Germany, gave the name of Ulm to the CB&Q Railroad's newest construction camp in 1892. The site was reportedly the highest point on the railroad between Billings and Edgemont, S.D.
The town grew quickly, rapidly becoming a shipping point for other communities in the area. Wheat, hogs, lambs, wool and cattle were brought in. By 1900, Ulm boasted sheep dipping vats, pens and facilities to shear up to 1,000 sheep a day. A depot arrived in 1903. By 1906, the town 28 miles southeast of Sheridan boasted a post office with daily mail deliveries.
In its heyday, Ulm's attractions included two grocery stores, a grain elevator, an ice house and a church. A school was built in 1910 two miles northwest of the town. In 1912, the school was moved into Ulm, and School District 37 was organized. A former resident of Ulm, interviewed in 1982, said four passenger trains ran through Ulm every day, two trains each way. By 1923, the town had a lumber company and a billiards parlor. Businesses also included a general store, the Ulm Cooperative Company.
The town went into decline in the 1930s. In 1930, the Polk's Directory listed Ulm as “a post office,” nothing more. Droughts, an invasion of Mormon crickets, and a change that routed the Custer Highway around the town contributed to Ulm's demise. The old railroad depot was abandoned, sold to a private owner in 1950 and demolished in 1976. Ulm's school closed in 1968, when District 37 was consolidated into the Clearmont school district. The town's homesteads reportedly were absorbed into ranches in the area.