Prospect began as a logging town, with its first sawmill operating in 1870. Prospect had a post office established in 1882 that was first named "Deskins" after the first postmaster. In 1888, there was a mill named Deskins Sawmill. The name of the community was changed to "Prospect" in 1889 because of plans made to run a railroad up the Rogue River, which would ostensibly improve the community's prospects.
Local events and sites of interest
On the Saturday of Memorial Day weekend, Prospect holds the Mill Creek Memorial festival. It honors veterans with a parade, a flag retirement ceremony, live music and games for children. All the proceeds go to a fund to help vets. In July Prospect hosts an airplane "fly-in" that helps support the Jackson County Search and Rescue, and in August a jamboree and timber carnival (a festival that includes lumberjack contests such as log rolling) are held.
On the last weekend in September, Prospect hosts Music in the Mountains, a two-day festival of bluegrass, country, folk and Americana music on the grounds of the Prospect Hotel.Prospect is the site of the Prospect State Airport. The Prospect State Scenic Viewpoint is nearby.