Arthur City is on the Red River at the intersection of Farm Road 197 and U.S. Highway 271 in extreme north central Lamar County. The town was founded by Capt. J. G. C. Arthur in 1886 as a stop on the St. Louis-San Francisco Railway. Arthur donated the land for the railroad right-of-way and had it platted into twelve blocks. The post office was established that same year. By 1890 Arthur City had 300 residents, three general stores, a Western Union telegraph office, a blacksmith shop, a furniture maker, and an undertaker. J. H. Arthur was postmaster. In 1892 a new hotel, a doctor's office, and a sawmill were established. A common school had been organized by 1896, when it enrolled twenty-five pupils and employed one teacher. The most prosperous years for the town were the early railroad days, when lumber resources were untapped and prices for farm produce were high. By 1904, however, the local timber supply was becoming exhausted, and many residents began to leave the vicinity in search of other jobs, particularly in cities such as nearby Dallas. In 1914 most commercial enterprises in Arthur City had closed, leaving the telegraph office, a grocery, a telephone exchange, and two general stores. Residents numbered 150. Throughout the 1920s and 1930s, the town had five businesses and 200 residents. By 1943 it had a population of 100 and three businesses. The school had closed by 1957, and local students attended school in the Chicota Independent School District. In 1959 the population was sixty. The growth of nearby Paris, the mechanization of farming, and the development of nearby Pat Mayse Lake led to an economic turnaround in the 1960s and 1970s. In 1961 the town had eleven commercial enterprises and a population of 300. By 1970 the population had stabilized between 200 and 250. Children attended the North Lamar schools. In 1983 Arthur City had eight businesses, two churches, a post office, and a community center. In 1989 it had five businesses and 200 residents, most of whom were part-time farmers and worked in nearby Paris. The population remained the same in 2000.