Although Fountain Green was the first Sanpete community to receive the railroad in the 1880s, it did not take full advantage of this opportunity, being the only major town in the region to drop in population between 1880 and 1890. Experiencing less fluctuation in size than most other Sanpete villages, Fountain Green reached its zenith of about 1,150 people in 1920, about twice its size of 578 in 1980. It had a population of 602 according to the 1990 census.

Fountain Green's flourishing in the early twentieth century, during which time it was considered the "richest town" in the county, was due mostly to its successful wool growing industry. Expanding from a cooperatively owned herd of Spanish Merino sheep in the 1880s, sheep growers greatly enhanced their profits after upgrading their herds with high wool producing Rambouillet stock.