Gradually being improved resort, approved a plan for its reorganization. Part of the low-income residents in 1868 migrated to the western slopes of Mount Iron and form a village Zheleznovodsk. And the resort opens up new sources of capital are built bathrooms of the building. And, as states in his guidebook Milutin M. (1879), "on both sides of the new highway were built and continue to build various buildings urban architecture. They appeared already to 30.
Zheleznovodsk takes the form of a small town. From the former village is left by this time somewhat doomed to demolition of the Cossack lachuzhek, Zheleznovodsk settlement there exclusively for the summer treating it with mineral water sources. " It should be noted an important role in the development of hydromineral base Zheleznovodsk Director of Caucasian Mineral Waters (1860-1870 gg.) SA. Additional information is available at BSA. Smirnov, hydrogeologists NN Slavyanov and AI Nezlobinskogo, Professor V. Vladimir.
The end of the XIX and early XX century brought significant changes to the further development of the resort. Constructed a magnificent building in the eastern style Ostrowski baths, fed line Railway Beshtau-Zheleznovodsk comes from hydroelectric electricity "White Coal", erected Pushkin Gallery, New Treasury hotel, the Palace of the Emir of Bukhara, nursing homes are under construction. Already in 1911 treated at the resort about 6000 people, and in 1914 – about 10 thousand patients. Its rapid development Zheleznovodsk receives after 1920, when finally established Soviet power in the North Caucasus, and when April 8 People's Commissariat of Health recognizes resorts Pyatigorsk, Essentuki, Zheleznovodsk Kislovodsk health care institutions of national importance.