During the summer of 1870, the fort at Kanab was described as a bustling center of activity. It became the focal point for local pioneering, missionary work, and exploration, and was also a relief point, trading-post, and base of operations for the Geological Survey. President Young visited the fort in April 1870 to bless the land and set it apart for the gathering of the Saints. He made the decision to stock the country with cattle, sheep, and horses. Within months, the townsite was surveyed and town lots were distributed among the local families. The next day the Mormons organized a ward; in September the group built a schoolhouse.

A visitor to Kanab one year later described the struggles of the desert town: "The grasshoppers had taken part of the wheat that was growing. The crop was light at the best, having been planted with a lick and a promise and not watered until too late to have a satisfactory stand." Because of the difficulty in working the land, the locals decided to organize cooperatively for farming. The group farm was located south of the town and included 120 acres of corn, cane, and other food products. In 1881 President John Taylor of the LDS Church called James Guthiar and Ruben Broadbent to move to Kanab to build a grist mill in Kanab Canyon, three miles north of town. During the 1890s, Zadok K. Judd built a small grist mill on his own property to the east of town. In 1915 a group of investors built a third major grist mill.