Caldwell, the county seat of Burleson County, is at the intersection of State highways 21 and 36, in the center of the county. In 1840, when the Texas Congress annexed to Milam County all of Washington County north of Yegua Creek and west of the Brazos River, Caldwell was designated as the county seat of a new county to be formed. The proposed town, surveyed by George B. Erath and named for Mathew Caldwell, was laid out parallel to the Old San Antonio Road and west of Davidson Creek; the site encompassed a settlement founded by Lewis L. Chiles. Until Burleson County was organized in 1846, Caldwell served as the county seat of Milam County.
By 1856 the population of the town was 300, and the Caldwell House, known as one of the finest hotels in Texas, was the rendezvous of westward-bound travelers on the Old San Antonio Road. Caldwell also had a post office, male and female academies housed in the Masonic building, Baptist and Methodist churches, seven general stores, a saloon, a blacksmith shop, a livery stable, and a fine red-brick courthouse. By 1878 Caldwell had its own newspaper, the Caldwell Register, and by 1886 the town owned a fine hearse, "kept for the service of the community" by a local livery stable. It also had a bottling works and an ice house.
In 1880 the Gulf, Colorado and Santa Fe Railway built its main line through Caldwell and located the depot a half mile from the courthouse square. Caldwell soon became an important shipping point for the county. Gins, a cottonseed oil mill, and wholesale groceries were added by 1900, and by 1905 six passenger trains arrived daily. In 1912 the Houston and Texas Central, now the Southern Pacific, built a line from Hearne through Caldwell to Flatonia, where it joined a line to the west coast. Freight and passenger service on this line began in 1913. Although passenger service has been discontinued, Caldwell is still served by these two major railroads and Central Freight Lines. Passenger service, both north and south and east and west, is now provided by Kerrville Bus Lines.
Caldwell was incorporated in 1891 with a mayor-council form of government. The city maintains a library (established in 1976 and a member of the Texas Library System), a municipal airport (dedicated in 1968), five parks, and equipment and housing for a Volunteer Fire Department, organized in 1886. The first school of record was a Male and Female Academy advertised in 1844. In 1852 the Masons opened a Masonic Institute (for males) and in 1855 a Female Academy. By 1872 the Masons had given permission for their building to be used for "free school purposes." The first public school built with tax money was erected in 1882 by the county school district. This school came under the supervision of the city in 1891 and remained there until 1923, when the citizens voted to establish an independent school district. In 1990 the Caldwell ISD, the largest in the county, had four campuses and 1,651 students.
During the Reconstruction period, a company of State Police was stationed in Caldwell. A company of the Texas National Guard, Company E, was headquartered in Caldwell from 1898 through 1940, when it became part of the Thirty-sixth Infantry Division. Caldwell was the smallest town in Texas to have a full infantry company; its soldiers were all volunteers from Caldwell, Somerville, and the rural parts of the county. Many of these men were captured by the Germans at Salerno, Italy, in 1943 and were prisoners of war until the Germans surrendered in 1945.
The population of Caldwell, which was 2,165 in 1940, remained static until the 1970s, when oil was discovered in Burleson County. In 1990 the population was 3,181, and in 2000 it had grown to 3,449. At that time the town was a supply point for the agriculture and livestock industries and the oilfields in the county. The Burleson County Industrial Foundation, organized in 1961, and the Chamber of Commerce have been responsible for locating four manufacturing plants and twelve oil-related industries in the town. The town also had a newspaper, a veterinary clinic, and four financial institutions. The courthouse square, dominated by the fourth courthouse to be built on the site, was the heart of the town. Motels, restaurants, a shopping mall, grocery stores, and service stations lined the two highways. Medical facilities included two clinics, two dentists, a nursing home, and the Burleson Memorial Hospital, operated by a county hospital district. The hospital, opened in 1978, was a successor to Thomas L. Goodnight Memorial Hospital, dedicated in 1956. Recreational facilities included baseball fields, tennis courts, parks, a country club, a swimming pool, and a saddle club arena. The town had twelve churches, two museums, nine civic clubs, and two veterans' organizations. It was also the home of the Burleson County Fair and the Kolache Festival.