Galata was a trading center and shipping station for cattle on the Great Northern Railroad. David R. McGinnis was so impressed by the beauty of the area, he filed a claim for the land near the railroad in 1901. He built a two-room house the following year. The first post office was also established in 1902. McGinnis' house burned down in 1904 and he began rebuilding in 1905. He built a two-room real estate office and eight-room hotel, and convinced a storekeeper to run his business out of one of the rooms in the real estate office. His business proved to be profitable, as ranchers would buy $500-$1000 worth of supplies at a time. In later years, business started to decline, and he eventually closed. By 1910 Galata had four lumberyards and five stores.
Galata is located in north-central Montana, east of Shelby on U.S. Highway 2.