Ashwood is at the junction of Farm roads 1728 and 3156, thirteen miles north of Bay City in northeastern Matagorda County. The railroad reached this town on Caney Creek when a branch of the New York, Texas and Mexican Railway was built from Wharton to Van Vleck in 1899–1900. Large numbers of ash logs were shipped from the town. In 1914 the community had a population of eighty-seven, a general store, and a mill. By 1925 the population was estimated at 200. In the mid-1930s the town had two schools, a church, a business, and a number of scattered dwellings. In 1942 the population had dropped to around 100 and by 1950 to twenty. In 1967 population estimates show a brief rebound to thirty, but for a number of years after that the town was no longer listed. In 2000, however, the population had grown to 120. A post office was established in Ashwood in 1910 with Mittie D. Hanson as postmistress. Annie M. Smith succeeded her in 1916 and not only operated the post office, but also the express office and the J. Fisher Smith Mercantile Store until her retirement in 1952. In 1952 the post office was discontinued. In 1917 Ashwood had a one-room school with four grades. In 1938 a two-teacher school for black children was there. In the late 1980s Ashwood had a few scattered houses and the Ashwood Depot, which was restored in 1986.