Shepherdsville was founded by and named after Adam Shepherd in 1793. In its early days, the major industry in Shepherdsville was salt production from the Salt River. The first post office in Shepherdsville opened in 1806. In 1836, a mineral water spa called Paroquet Springs opened. The mineral water supposedly had medicinal properties and so sufferers from a variety of maladies would visit Shepherdsville to drink and bathe in the water. During the American Civil War, the railroad bridge over the Salt River at Shepherdsville was a potential target for sabotage and was guarded by Union troops. In 1879, the Paroquet Springs hotel burned to the ground, but water from the springs continued to be bottled and sold until 1915. Throughout most of the 20th century, Shepherdsville was primarily an agricultural area. With the construction of the Kentucky Turnpike in 1950's and Interstate 65 in the 1980s, people who worked in Louisville, Kentucky could live outside the city. From then on Shepherdsville experienced a period of rapid growth.
The original law enforcement body for the City of Shepherdsville lay in its town marshal. The Shepherdsville Police Department today is a highly professional organization, which not only continues in the traditional role of crime suppression, but also has expanded into the area of crime prevention.