D'Hanis is on Parkers Creek at the intersection of U.S. Highway 90, Farm roads 1796 and 2200, and the Southern Pacific Railroad, eight miles west of Hondo in western Medina County. The community is sometimes called New D'Hanis to distinguish it from the site of old D'Hanis one mile to the east. The original settlement was the third made by Henri Castro through his agent, Theodore Gentilz. When established in the spring of 1847 by twenty-nine Alsatian families, D'Hanis was the frontier settlement on the Old San Antonio Road. Castro named the village for William D'Hanis, Antwerp manager of his colonization company. Jean Batot and his son Christian were the first settlers to arrive. Town lots and twenty-acre farms were surveyed and deeded to the first colonists.
With building materials in short supply, the early settlers built rough shelters of mesquite pickets and thatch, to be replaced eventually by the distinctive European-style rock homes of the settlement. Catholic services, conducted by priests from Castroville, were held in a small structure built in the middle of the village. The building of nearby Fort Lincoln in 1849 afforded the settlers employment and much-needed protection from Indian raids. By 1850 the settlement comprised twenty dwellings and had a schoolteacher. A post office was established in 1854, and the town became a stage stop on the San Antonio-Rio Grande road. St. Dominic's Church was built in 1869, and for a time in the early 1870s two nuns of the Sisters of Divine Providence taught school in D'Hanis.
In 1881, when the Galveston, Harrisburg and San Antonio Railway built across Medina County, it bypassed old D'Hanis, then the site of two stores, a dance hall, and sulfur-well baths. The new town grew up around the railroad loading depot 1½ miles west. Over the next few years the post office, the businesses, and the citizens moved to the railroad site, which was called New D'Hanis for a time and eventually became D'Hanis. The D'Hanis Brick and Tile Company was founded in 1883 and was still in operation in the 1980s. By 1890 the community contained four general stores, one saloon, and a flour and grist mill, and by 1896 two hotels served the community.
In 1900 the population numbered 266. St. Anthony's School was built in 1908, and Holy Cross Church was completed in 1914. The weekly D'Hanis News began publication in 1908, became the Star some years later, and was discontinued in 1923. A second brick factory, Seco Pressed Brick, opened in 1910, the year the D'Hanis Independent School District was formed. The town's first bank opened in 1916. A Catholic church, Our Lady Queen of Peace, was built in 1924 for the Mexican-Americans of the town. The population was an estimated 270 in 1930, 550 in the mid-1940s, and 500 to 550 from that decade through 1990, when it was 548. The population remained the same in 2000. D'Hanis installed waterworks in 1955, street lights in 1957, and a sewer system in 1973. The town was flooded in 1894, 1919, and 1935, and Holy Cross Church was badly damaged by fire in 1963, though it was rebuilt the following year.