Cayote is on Farm Road 56 by Childress Creek seven miles north of Valley Mills and twenty-three miles northwest of Waco in southeastern Bosque County. The community was founded in 1866–67 when John Cox built a grocery store two miles southwest of the future townsite. Cox sold his store in 1870, and the new owners moved the store to the town's present location to be close to a good source of water. Shortly thereafter, the town was designated Coyote because of the number of these animals in the area, but a spelling error changed the name to Cayote. The store acquired a post office in 1879. In the mid-1880s Cayote had the store, a gristmill and cotton gin, and a population estimated at fifty. Its population rose to 100 during the 1890s; by the end of 1909, however, the local post office had closed. Cayote's estimated population was twenty-five in 1933; its population estimate remained constant at seventy-five from 1943 through 2000.