The Broken Arrow Muscogees had separated from Coweta when the Coweta group grew too large to hold ceremonials. A group who had been away gathering river cane and bois d’arc tree limbs by “breaking” them, offered to start a new town and called themselves the Broken Arrows after the act of snapping or breaking materials for making arrows. This was the manner in which new towns, known as daughter towns, were formed.

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The Broken Arrow Muscogee people were the first permanent residents of the area. Some arrived as early as 1828, and others as late as 1838. Prior to their arrival, migratory indigenous people were here. The Broken Arrow Muscogee built log homes and farms. Spring water was available to them in multiple locations, including what is today Ray Harral Nature Park. The ceremonial grounds were in the same general area as the springs. Farms and homes were located all across southern parts of the modern city, and the Muscogee thrived in the new area. The river bottoms provided excellent soil for crops of corn, beans, squash, hominy, melons, and pumpkins as well as timber and habitat for wild game.

The Muscogee Nation eventually chose Okmulgee as their capital and built a log Council House there which was replaced with a stone building in 1878. It stands today in the town square and housed two houses of legislature, the House of Kings and the House of Warriors whose elected members represented the various towns like Broken Arrow. White Church was the earliest church and school for the area, built in 1875 and still standing and in use on South Olive Street, but later Wealaka School (a boarding school) was built in 1881 on the south side of the Arkansas River. A ferry was available to transport people across the area of what is today the Indian Springs Sports Complex. Another ferry operated at County Line. A road ran along the north bank of the Arkansas from Fort Gibson to Talasi, later known as Tulsey Town, and today as Tulsa.
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Following the Civil War, a new treaty with the Muscogee gave the United States the authority to build railroads through the Muscogee Nation. Later, the United States passed laws to open the Muscogee Nation to white settlement and terminate the communal ownership of the land. Although the Muscogees opposed these actions, they were completed just before statehood. About the same time, a townsite company began to sell lots and plat the town around a railroad depot. The new city of Broken Arrow came into existence in 1902, named for the Muscogee settlement in its midst. The town was Broken Arrow, Indian Territory for five years until statehood in 1907.