The predecessor to Island Creek Coal Company was founded by Huntington lawyer Z. T. Vinson and other investors as a West Virginia enterprise. They sold their firm to U.S. Coal & Oil Company, backed by Northern capital and managed by William H. Coolidge and Albert F. Holden. In 1902, Holden and Coolidge spent their summer in Logan County, inspecting a 30,000-acre land tract owned by the heirs of James Andrew Nighbert on Copperas Fork of Island Creek. The company bought that tract for $600,000 in cash and stock in their company. They built a railroad line from the city of Logan, where the Chesapeake & Ohio Railroad had completed its Guyan Valley Extension, and Island Creek shipped its first trainload of coal in December 1904. During the same years, the company built the town of Holden as a model coal town, four miles from Logan.

The firm grew quickly, opening 10 mines within three years and employing thousands of immigrant miners. U.S. Coal & Oil was soon renamed Island Creek Coal Company and, working three of Logan County's six coal seams, became a leader in the industry. Soon it expanded into Mingo, Wyoming, McDowell, and Fayette counties. In following years, it also bought other firms and opened mines in other states in the eastern U.S. The first company president was Holden, who died young. He was followed by Thomas B. Davis, James Draper Francis, Raymond Salvati, and Stonie Barker. In 1969, Island Creek lost its independent identity as it was sold to Armand Hammer of Occidental Petroleum Company. A few years later, some of Island Creek's assets were sold to a new firm, Ioxy. The company moved its headquarters from Holden, and much of that town was purchased by the West Virginia Department of Highways to make room for four-lane U.S. 119, Appalachian Corridor G.