Mount Washington became the economic center of Bullitt County by the 1850s. In the autumn of 1862, during the Civil War, the town was held by John Wharton's Confederate cavalry, who skirmished with Maj. Gen. Thomas L. Crittenden's men north of Mount Washington along Floyds Fork on October 1. A defeat the following day led to a Confederate retreat from the area.
Through the nineteenth century, a two-room school building stood on the southern end of Bardstown Road (now Highway 31E), but in 1916 a new building consisting of four classrooms was built. Where the four-room classroom building once stood, now stands Mt. Washington Middle School. This building was constructed in the early 1940s as the high school. Mt. Washington Middle School had to expand and remodel in 1995 because the population was growing tremendously, and now supports over 200 classrooms and offices. Since then, another middle school had to be built on the other side of the city. That project was completed in 2006.
Mount Washington's industries aged, and by the 1930s it was no longer the most prominent town in the county. The decline continued when fire burned much of the business district on November 18, 1940. Mount Washington enjoyed an influx of new residents starting in the late 1960s with the opening of General Electric's Appliance Park nearby in Louisville. The population of Mount Washington grew from 2,020 in 1970 to over 9,000 by the 2010 census. Despite a downturn at the Appliance Park, and the Mount Washington continues as a commuter town of Louisville.