Denison is on U.S. highways 75 and 69 seven miles north of Sherman in northeastern Grayson County. In the early 1870s William Benjamin Munson, Sr., and R. S. Stevens bought land in the area and prepared for the arrival of the Missouri, Kansas and Texas Railroad (the Katy). The townsite was laid out in the summer of 1872 and named for the vice president of the Katy, George Denison. The first train arrived on Christmas Eve. The town had over 3,000 residents by the summer of 1873, when it incorporated. Although Main Street appeared to be an orderly collection of businesses, the surrounding area consisted of a tent city, inhabited by bars, gambling halls, and houses of prostitution.
On February 6, 1873, Denison established the first free public school in Texas. The first Denison Independent Order of Odd Fellows was organized on February 19, 1873. Denison had the first women's club in Texas; the XXI club began in 1876. In 1886 a post office opened, and in 1889 the town had 5,000 residents. During the next ten years Denison established itself as a retail and shipping point for North Texas. In addition to the tracks of the MKT, the town also became a stop on the St. Louis, San Francisco and Texas and the Kansas, Oklahoma and Gulf railroads. Five additional rail lines that connected Denison with other communities in North Texas were chartered between the late 1870s and 1900, including the first interurban electric line between Denison and Sherman in 1896. By the end of the 1870s local businesses included two cotton compresses, a large flour mill, and a slaughterhouse capable of handling 700 cattle a day. In 1884 the town had an opera house that seated 1,200. In 1889 the Denison Herald began publication. During the twentieth century industrial and manufacturing plants provided a diversified economic base for the community. Electronic parts, clothes, furniture, and a variety of plastic goods are among the products manufactured in Denison.
In 1900 the population surpassed 10,000. By the mid-1920s Denison had just over 17,000 residents and 400 businesses, including four banks. It also had two high schools, nine grade schools, and numerous churches. In 1936 Denison had 13,850 residents and 460 businesses. By the end of World War II the number of residents was just short of 16,000. The population was 26,000 in 1966, when businesses numbered just under 600. In 1989 Denison had a reported 24,234 residents and 427 businesses. In 1990 the population was 21,505, and in 2000 it was 22,773. Denison was the birthplace of the thirty-fourth president of the United States, Dwight David Eisenhower. The home he was born in in 1890 has been returned to its original appearance and sits in the Eisenhower Birthplace State Historic Site, a three-acre area that includes a museum.