Clay City, Illinois, is a small village in Clay County with a population of around 817 as of 2025, known for its quiet, suburban-rural charm and conservative community. Named after Kentucky statesman Henry Clay, the village was established in 1855 near the O&M Railroad, evolving into a trading hub for local farmers. Located near the Little Wabash River, it has a rich history tied to early settlers like Solomon Harter Mueller, who built a farm and mill in the early 1800s, and later thrived with the discovery of oil in 1936, which continues to support local businesses.

Clay City currently has 2 single family homes for sale with an average list price of $167,500 and 6 lots for sale with an average list price of $3,540,391.67. The average annual property tax for Clay City is $1,747.03.