Albany, the county seat of Shackelford County, is at the intersection of State Highway 6 and U.S. Highway 283, in the central part of the county. The townsite was donated by Henry C. Jacobs, the first sheriff. William Cruger named the town for his former home, Albany, Georgia. One of the town's Bicentennial projects was a rock fountain dedicated to the memory of the Georgia volunteers killed in the Goliad Massacre during the Texas Revolution.
The site was selected for a county seat to supersede Fort Griffin on November 8, 1874. The public sale of town lots took place on August 2, 1875; within a few months T. E. Jackson built a general store. Cattle drivers going up the Western Trail to Dodge City soon began to use the town as a supply point. The arrival of the Texas Central Railroad in December 1881 made Albany a shipping point for cattle. An election on July 20, 1883, authorized Albany's first public school system, which covered eight square miles; by 1986 the Albany system covered 560 square miles. In 1883 the Albany News superseded the Albany Star. The Shackelford County Courthouse was built that same year.
Cattle and sheep raising dominated the local economy until the emergence of the oil industry in the twentieth century. Discovery of the Cook oilfield in 1926, and later discoveries, have made Albany an oil drilling, producing, and supply center. Ranching continues to be an important part of the town's economic life; since 1920 the town slogan has been "Albany, the Home of the Hereford."
The Old Jail Foundation, chartered in 1977, restored the 1878 stone building, the first permanent jail in the county seat. The Old Jail Foundation Art Center opened in 1980; the museum houses a collection of Chinese tomb figures dating from the third century B.C., a collection of pre-Columbian art, and nineteenth and twentieth century painting and sculpture, including works by Henry Moore, Aristide Maillol, Pablo Picasso, Amadeo Modigliani, Giacomo Manzu, John Marin, and others. The Fort Griffin Fandangle, an outdoor theater production of local history that originated in 1938, is presented during the last two weekends in June. In 2000 the community contained 1,921 inhabitants and 139 businesses.