Hillister, eight miles south of Woodville in south central Tyler County, began as a sawmill town. It was probably originally called Hollister, after a Texas and New Orleans Railroad Company official, although another source for the name may have been two sawmill operators named Hallister. Hillister was one of several towns that sprang up in Tyler County with the advent of the lumber industry and the railroads. The post office was opened there under the current name in 1882, and William R. McCarty, who ran a sawmill, became the town's first postmaster. In 1886 the Galveston Daily News reported that Hillister had produced in the previous year some 354 carloads of lumber products, a moderate amount. McCarty's mill was succeeded by a mill set up by the Express Lumber Company. By 1946 Hillister was still producing seventy-five cars per week of poles and piling.
The population of Hillister stayed near 100 until the early 1940s, when it began to grow. During that decade it reached 250. Thereafter, it declined to about 200, and by the early 1980s was fifty-nine. At the height of its business activity, during the early 1940s, Hillister had ten businesses. In 1988 it had three. In the 1980s Hillister had a rural economy centered on farming, poultry, and cattle interests. The Texas Highway Department listed the community in 1985 as a railroad station. One of the Hillister area's old squared-log structures, the Tolar home, is preserved at Heritage Garden Village in Woodville. In 1990 and again in 2000 the population of Hillister was 200.