Camp Wood is on the Nueces River at the intersection of Farm Road 337 and State Highway 55, just below Camp Wood Creek in far southwestern Real County. The settlement was founded in 1920 by workers of the Uvalde Cedar Company for the purpose of exploiting the abundant cedar in the area. The site of the town and the immediate vicinity have, however, been inhabited for several millenia, as revealed by archeological evidence. The town is situated in the Nueces Canyon on the Balcones Escarpment, at the southern edge of the Edwards Plateau, amid plentiful supplies of water, game, and other natural resources. The excellence of the site for habitation is attested by evidence of successive occupations since the Archaic and Neo-American periods. The modern town's water is supplied by the same spring that earlier served San Lorenzo de la Santa Cruz Mission (1762–71), established by Franciscans for the Lipan Apaches who inhabited the region during the historic period, and the United States military outpost Camp Wood (1857–61), from which the town derives its name. After the mission was abandoned, Indians continued to return to the site. White occupation did not cease with the withdrawal of federal troops at the start of the Civil War. Edward D. Westfall moved to the site at this time and remained until 1874, raising cattle and serving as a scout for Confederate troops stationed there. Jerusha Sánchez, a midwife in the Nueces Canyon, also reportedly came into the area in the early 1860s, and in 1864 the family of George Schwander was occupying the remains of the old mission when Lipans killed Mrs. Schwander and abducted their son, Albert. In 1873 the widow Elizabeth Hill moved to the canyon with her three sons, John, Ed, and Jim, the last of whom subsequently served as a scout for Gen. John Bullis and purchased a house from the Sánchez family. The United States military and the Texas Rangers also briefly reoccupied Camp Wood in the second half of the nineteenth century. In 1917–18 Joe Sweeten ran a store a mile north of the site of present Camp Wood on the Uvalde-Rocksprings road (Highway 55); the store served local ranchers and freighters hauling goods between Rocksprings and Uvalde and was referred to as Real City.
In 1920 Camp Wood became the northern terminus of the Uvalde and Northern Railroad, and the townsite was formally laid out. Cedar workers initially lived in tents, but during the 1920s the settlement rapidly developed into a prosperous community. The post office was established in November 1921, and the town was incorporated in 1936. However, the depression and the depletion of the region's cedar curtailed development. The Uvalde and Northern ceased operation in the early 1940s, and ranching, in particular the raising of Angora goats, replaced cedar as the principal industry, with tourism and hunting assuming increasing importance in the local economy.
In March 1924 Charles A. Lindbergh made an unplanned stop in Camp Wood, three years before his solo flight from New York to Paris. Lindbergh, then waiting to enter Brooks Field at San Antonio as a United States Air Service cadet, was attempting to fly to California with a friend, Leon Klink, and followed the Uvalde and Northern railroad up the Nueces River, mistaking it for the Southern Pacific along the Rio Grande. When the line ended at the recently established cedar town, Lindbergh, realizing his error, landed in a pasture to the north. Later, having flown to Camp Wood itself and landed on the main street, he attempted to take off, hit a telephone pole with a wing, and crashed into the paint section of Walter Pruett's hardware store. The two fliers remained in Camp Wood for several days, awaiting parts and making repairs, and their visit and the circumstances surrounding it were still vividly recalled and related over half a century later. In 1976 the town of Camp Wood renamed a park and a street after Lindbergh and Klink respectively, and the state placed a historical marker celebrating the event.
Though population estimates for Camp Wood remained at 700 to 800 between 1920 and World War II, large amounts of local real estate were subsequently purchased by outsiders who are drawn to the area by its natural beauty and who use the land for hunting or vacationing; meanwhile, large numbers of young people have left in search of greater opportunity. In 1990 the population was 595, and in 2000 it was 822.