Iolanthe was a small rural community located about fifteen miles north of Sterling City off Farm Road 163 in northern Sterling County. Settlement in that area began about 1894, and in 1895 a post office was established with Jacob M. Cooper as postmaster. The post office operated out of a general store. Residents opened a rural school about 1895, and in 1896 the Texas State Gazetteer reported that Iolanthe had a population of thirty that included cattle raisers J. W. McWilliams, D. L. Phillips, and U. D. Thompson. A Baptist church was organized around 1899. The post office closed briefly in 1910, reopened in 1911, and was finally discontinued on May 15, 1917, when all mail was routed to Sterling City. Iolanthe still appeared on a 1926 land grant map of Sterling County, but no population estimates were available in the 1900s. By the 1960s all that remained on highway maps was the Iolanthe Cemetery located off Farm Road 163.