Ray City, which was formally named Ray's Mill, was located about one mile East of the present town on Ray's Mill Pond. Ray's Mill was named for Thomas M. Ray and retained that name for several years. The mill was operated by water from the pond and was used to grind meal and hominy grits from corn. Mr. Thomas Ray operated the mill until the time of his death. At one time, the mill was the gathering place of the community, where the men would take their corn to be ground. In 1909, Perry T. Knight, State Representative from Berrian County, introduced a bill to change the town's name to Ray City. The bill became a law on August 16, 1909 and Ray City became incorporated.