The town of Stedman was settled in 1841 when John Culbreth Blocker built a stagecoach house and post office on land that he had purchased. The town was incorporated in 1917. Today, the 1.4-square mile town has a population of 664.

It is named for Civil War Major Charles Manly Stedman. Stedman was raised in Fayetteville; and served in the Civil War as a private in the Fayetteville Independent Light Infantry during the Civil War. Stedman was the Lt. Governor of North Carolina from 1885 to 1889 and served in the US House of Representatives from 1910 to 1930. He was the last Civil War veteran to serve in the US Congress and is interred at Cross Creek Cemetery in Fayetteville.