Nässjö was for a long time only a rural village with agriculture as the dominant occupation. The turning point was the construction of the Swedish railway system. The southern main line railway, finished in 1864, passed through Nässjö. Later, other railways were inaugurated, whereby Nässjö, due to its geographical location in the country, became an important junction. A line to Katrineholm was opened in 1874, and that year also the opening of the Oskarshamn line; the one to Halmstad in 1882; to Kalmar in 1914. Today, Nässjö is the only Swedish junction where railways in six different directions meet.
Swedish Windsor chairs
As a result industries moved to Nässjö, and the population increased. The most important industries were wood industries due to the forest covered Småland province area, at a time when it had become possible to factory manufacture the wooden chair (a.k.a. Windsor chair).
Its population continued to increase throughout the 20th century. In the 1940s production of electrical installation equipment began, and the industry "Eldon AB" was for a long time the largest industry of the town.