Vermillion, city, seat (1862) of Clay county, southeastern South Dakota, U.S. It lies near the confluence of the Vermillion and Missouri rivers, just north of the Nebraska border and about 15 miles (25 km) west of the Iowa border. Fort Vermillion, a trading post, was built on the site in 1835, and a permanent settlement was established in 1859. Norwegian and Swedish immigrants settled in the region to farm. A flood in 1881 nearly destroyed the city, which consequently was rebuilt higher on the bluffs. Its name is derived from the river, which in turn comes from the red (vermilion) clay along the river’s banks. The city is the seat of the University of South Dakota (established in 1862 and opened in 1882). Vermillion’s economy is based primarily on the university. The city is a distribution centre for snowmobiles, and the manufacture of pressure-washing equipment also contributes to the local economy. Area agriculture includes corn (maize), soybeans, and livestock. The National Music Museum preserves rare and antique musical instruments. The Austin-Whittemore House (1882) and the W.H. Over Museum (1883) preserve local cultural and natural history. Spirit Mound, a few miles north of the city, was visited by Meriwether Lewis and William Clark on their 1804–06 expedition; the Sioux believed it to be inhabited by small hostile warriors. Vermillion is on the Lewis and Clark National Historic Trail, and Union Grove State Park is nearby. Inc. 1878. Pop. (2000) 9,765; (2010) 10,571.