As population grew in the northeastern area, a meeting was held in 1837 at the Crossroads Hotel, northwest of Grayson, to call for the creation of a new county. Largely through the efforts of Senator William Grayson Carter, the grandson of Colonel Grayson, the new county was chartered May 1, 1838, with Grayson as the county seat and named for Colonel Carter. Portions of Greenup and Lawrence were taken to form the new county, the state's 88th out of 120 counties. Portions of Carter would later be used to form Boyd and Elliott counties. The county at one time extended all the way to the Big Sandy River.
Greenup, Boyd, Lawrence, Elliott, Rowan and Lewis counties.