Arroyo City, also known as Arroyo, is located on Farm Road 2925 a mile east of Farm Road 1847 and ten miles northeast of Rio Hondo in northeastern Cameron County. The area was settled by Mexican herders in the early 1860s and named for its location on the Arroyo Colorado. In 1904 the community had a school with one teacher and twenty-four students. A post office operated in Arroyo City from 1887 to 1907. In 1910 the settlement had two stores and a population estimated at ten. During the 1930s a few scattered houses remained in the area. In 1970 the community had various dwellings and businesses, and in 1990 Arroyo City was still marked on state highway maps.