Clear Lake City is on State Highway 3 a mile west of Clear Lake in southeast Harris County. In 1938 James Marion West sold 30,000 acres in southern Harris County, including the West family ranch, to Humble Oil and Refining Company (later Exxon Company, U.S.A.). In 1961 the National Aeronautics and Space Administration selected Houston as the site for its Manned Spacecraft Center (renamed the Lyndon B. Johnson Space Center in 1973), built initially on a 1,000-acre tract of the former West ranch. Humble Oil announced plans in January 1962 to develop 15,000 acres of the West property near the Manned Spacecraft Center for residential and industrial use. Humble and Del E. Webb Corporation agreed to form a jointly owned company to develop the site. Their venture, Friendswood Development Company, became operational the following May. Governor John Connally formally opened Clear Lake City on September 15, 1963. In 1968, the first year for which population statistics are available, 3,785 people lived in Clear Lake City. By 1970 the population had grown to 8,000, and in 1974 it was 16,000.
Clear Lake City was annexed to Houston in 1977. A utility shortage temporarily halted construction of new homes, but in 1988 the community led the Houston area in the sale of new, single-family homes. The diversified economy, which rests on the aerospace industry, retail business, and recreation and tourism, enabled Clear Lake City to weather the economic downturns that affected Houston during the 1980s. In fiscal year 1988 the Johnson Space Center, which employed 3,302 permanent civil-service employees, alone pumped almost $860 million into the Houston economy. Major aerospace contractors with local offices include Boeing, Ford Aerospace Corporation, McDonnell Douglas, and Martin Marietta. Tourists frequent numerous annual events in the area, including the Clear Lake Spring Fling and Boating Festival in April, the Lunar Rendezvous Festival in July, the Blessing of the Fleet in August, the Armand Bayou Nature Center Fall Festival in October, and the Christmas Boat Lane Parade.
Clear Lake City belongs to the Clear Creek Independent School District, which covers southern Harris County and northern Galveston County. This highly ranked school district had a 1988–89 enrollment of 20,725. The University of Houston-Clear Lake, authorized by the state legislature in 1971, began regularly scheduled classes in September 1974; this upper-level institution, located on 487 acres adjacent to the Johnson Space Center, had a fall 1988 enrollment of 7,196. The Clear Lake City Water Authority, a state agency established in 1963, is responsible for water and sanitary sewerage and drainage. It is the largest water authority in Texas and is funded through the sale of tax-exempt municipal bonds and water and sewer service. The estimated population of Clear Lake City in 1980 was 22,000.