De León's colony, the only predominantly Mexican colony in Texas, was established in 1824 by Martín De León, who petitioned the provincial delegation of San Fernando de Béxar on April 8, 1824, for permission to settle forty-one Mexican families "of good moral character" and to found the town of Nuestra Señora de Guadalupe de Jesús Victoria at an unspecified point on the lower Guadalupe River. As a prominent Mexican citizen, De León was given wider latitude than was allowed foreign empresarios. His settlement contract, approved on April 13, before the passage of restrictive colonization laws, specified neither time limitations, number of families, nor boundaries. His colonists were exempt for seven years from duties on everything except tobacco and from the customary excises and tithes on firstfruits for ten years. By October 1824 De León and twelve families had settled on the Guadalupe River at El Sabinal (Cypress Grove), thought to be the site where the river was discovered by Alonso De León, who had named the stream in 1689. The remaining twenty-nine families were delayed in what is now Tamaulipas, Mexico, by drought, then flood, but arrived the following spring. Not all the colonists were Mexicans. A few Anglo settlers such as Margaret R. Wright were already living in the area, and a number of Irish immigrants, headed by John J. Linn, arrived soon thereafter, bringing to sixteen the number of non-Mexican families. Each settler received a town lot, plus one league (4,228 acres) of grazing land and one labor (177 acres) of arable land. The empresario received five leagues upon the settlement of the forty-one families. The government issued these grants between 1833 and 1835.
De León named his settlement Guadalupe Victoria, after the first president of the Republic of Mexico. José M. J. Carbajal, De León's son-in-law and surveyor-engineer of the colony, platted the town, and the empresario designated the main street Calle de los Diez Amigos, implying the unity of the "Ten Friends" who, as principal citizens, were entrusted with the colony's welfare. Besides Martín De León, the first alcalde, the ten included three of his sons-in-law; Carbajal; Plácido Benavides, militia captain and second alcalde; and Rafael Manchola, attorney and commandant of La Bahía. Two of Martín De León's sons were also among the ten: first commissioner Fernando De León, who administered the colonization program, and his brother Silvestre De León, a chief merchant, militia captain, and third alcalde. The colonists settled on the Guadalupe and Lavaca rivers and Coleto, Garcitas, Arenosa, and Zorillo (Placido) creeks. The devout De León brought in priests alternately from La Bahía, Nacogdoches, and San Antonio until a church was established and a resident priest secured. A school and fort were soon built, a militia organized, and a courier service established with the Austin colony.
De León, a cultured Mexican aristocrat, was openly scornful of Americans. Clashes with bordering colonies were inevitable, especially since the De León colony boundaries were undefined, the empresario resented encirclement by Anglo-American colonists, and the colonization laws favored Mexicans. Also, De León had not yet notified authorities of exactly where he had established Guadalupe Victoria. Consequently, the legislature of Coahuila and Texas inadvertently included the De León colony within the boundaries of the grant made to Green DeWitt in April 1825. A clash resulted when DeWitt's colony was established at Old Station, near the mouth of the Lavaca River, in 1825. As a Mexican citizen De León received preference in the ensuing legal battle, settled on October 6, 1825; DeWitt's contract required him to respect the rights of those already settled in his designated area. Relations further deteriorated in October 1826. The schooner Escambia arrived at the mouth of the Lavaca with merchandise for trade, which included contraband tobacco. Upon discovering the infraction the political chief at San Antonio ordered De León, with the aid of Manchola's La Bahía garrison, to seize the contraband. It was rumored that De León was allying with Indians to "cut off the White people as far as the Colorado," and that he intended also to cut off DeWitt's head and tie it to his saddle. With little incident, however, De León and Manchola seized the contraband along with the colonists' guns and removed DeWitt to La Bahía for trial. Apparently Stephen F. Austin's intervention finally quieted the matter. In August 1827 the government ordered DeWitt to abandon Old Station because of its easy access to smuggled goods. Most colonists returned to Gonzales, while hatred increasingly characterized the De León-DeWitt relationship, despite an important treaty with the Karankawas negotiated in 1827 by De León, DeWitt, and Jacob Betts of Austin's colony.
That same year the Mexican empresario petitioned the government to designate the boundaries of his colony, which were declared in 1828 to be Matagorda Bay on the south, Mission Valley on the north, the Lavaca River on the east, and Coleto Creek on the west. Yet, a border dispute erupted with the Power and Hewetson colony to the south in 1828 and another with DeWitt in 1830. In 1829 De León had received permission to bring in an additional 150 families and to augment his territory. With the help of the ayuntamiento of Goliad he petitioned the government to annul the Power and Hewetson contract. The next year he forcibly tried to remove twenty-five DeWitt families from the newly designated area. This time, however, the government ruled that De León was encroaching, refused to nullify the Power-Hewetson contract, and annulled De León's boundary augmentation. In 1831, however, DeWitt's grant expired and extension was refused. De León was therefore free to colonize vacant lands in DeWitt's old grant. After much dispute the government ruled in May 1832 in favor of the De León colonists; preference was given to Mexicans wherever they occupied land. Although Martín De León died in the cholera epidemic of 1833, more than 100 titles were given to his colonists by July 1835, making him the only empresario besides Austin who completely fulfilled his contract. The De León colony comprised all of present Victoria and Calhoun counties and extended into Lavaca, Jackson, and DeWitt counties as well. Settlers farmed and raised horses and cattle. The estimated wealth of the colony at the empresario's death was over $1 million.
The De León family were ardent Federalists and supported the revolution against Antonio López de Santa Anna. Many citizens of Guadalupe Victoria, notably John J. Linn, Juan Antonio Padilla, José M. J. Carbajal, Plácido Benavides, and Fernando De León, participated in the Consultation of 1835 and the Convention of 1836, served with the revolutionary army, or otherwise aided the Texas cause. Since most were Mexican citizens of Spanish descent, however, Santa Anna considered them traitors, and they suffered severely during the occupation by Gen. José de Urrea's forces after the battle of Coleto. After the Texas victory at San Jacinto they also suffered the ire of incoming Anglo-Americans, many of whom were fortune hunters and soldiers, who branded them as Mexican sympathizers. The De León family was particularly ostracized and forced to flee to Louisiana and Mexico, their lands and livestock taken by those Linn called "remorseless Gaels of the nineteenth century." The Mexican municipality of Guadalupe Victoria became an English-speaking town, with a new government under the Republic of Texas, and Linn, the last alcalde, was elected first mayor. A population of about 300 grew rapidly as American, German, and other immigrants settled in Victoria. Many descendants of the original colonists still live in the town or surrounding counties, some on portions of their forefathers' land grants.