Graceton is near the junction of Farm Road 726 and State Highway 154, eight miles east of Gilmer in eastern Upshur County. It was settled in the early 1880s and was named for Grace Simpson, the daughter of Judge Robert Walton Simpson who donated a plot of land for a church. When the Marshall and East Texas Railway was built through the area in 1909, Graceton became a station. A post office operated at the community from 1909 to 1919. By 1914 Graceton had an estimated population of twenty-five, a steam gristmill and cotton gin, a planing mill, two general stores, and a church. The railroad was abandoned in the early 1920s. In the mid-1930s the community still had a school, a church, a store, two cemeteries, a number of houses, and an estimated population of 280. After World War II many of Graceton's residents moved away, and by 1952 its population had fallen to forty. In the mid-1960s only a few scattered houses remained there. In 1990 Graceton still reported an estimated population of forty. By 2000 the population reached 100.