Commerce is at the juncture of State highways 50, 11, 24, and 224, fifteen miles from Greenville in northeastern Hunt County. It owes its origins to William Jernigin, a pioneer merchant in partnership with Josiah Hart Jackson in nearby Cow Hill, who in 1872 opened a mercantile store on the site of the northwest corner of the present town square to take advantage of a new trade route that developed with the building of a new bridge on the South Sulphur River. The community grew up around Jernigin's store and apparently received its name on one of Jernigin's business trips to Jefferson. Jernigin had his merchandise sent to "commerce," since his small community did not have a name. In 1885, the year of incorporation, Commerce had twelve businesses in addition to a hotel and livery stable, a wood shop and wagon factory, and a steam mill and gin, as well as a church and school. In 1887 the St. Louis Southwestern Railway (the Cotton Belt) connected Commerce with Texarkana, Sherman, and Fort Worth. During the 1890s Commerce gained additional rail outlets to Ennis and Paris with the arrival of the Texas Midland Railroad. Commerce has been a college town since 1894, when William L. Mayo moved his East Texas Normal College from Cooper to Commerce to benefit from the rail connections and to collect a $1,000 bonus offered by the community.
By 1910 the population of Commerce had risen to 2,818, and the town had a flour mill and cottonseed oil mill, four cotton gins, a roundhouse, rail yards and machine shops, and four banks; East Texas Normal College enrolled 900 students. The population continued to grow until the 1950s, even though growth was limited during and after 1930. In the early 1950s the roundhouse was abandoned, and the machine shops were moved to Tyler. In 1956 passenger service to Commerce was discontinued. Also during this period the many cotton gins of Commerce began to close; the last one shut down in 1978. The population fell from 5,889 in 1950 to 5,789 in 1960. The college became part of the state college system in 1917 and began to grow rapidly, as the "baby boom" generation entered college. East Texas State College, which became a university in 1965, began to replace cotton and the railroads as the basis of the economy. In addition, the Commerce Industrial Development Association, formed in 1956, began to attract manufacturers. The population of Commerce was 9,534 in 1970, 8,136 in 1980, 6,825 in 1990, and 7,669 in 2000. The decline in enrollment at East Texas State University, from nearly 10,000 students in 1975 to 7,135 in 1984, ended in the late 1980s. Manufacturers in Commerce include United States Brass and Montgomery Controls, Sherwood Medical, Manatee Homes, and American Wood. Commerce is the second largest town in Hunt County.