Howe is at the intersection of U.S. Highway 75, State Highway 5, and Farm Road 902, on the Southern Pacific line ten miles south of Sherman in southern Grayson County. The first settlers in the area arrived around the time of the Texas Revolution in 1836. In 1843, it is said, the last Indian battle in Grayson County was fought in the area. The first settlers of Howe were Jabes and Harriet Haning and Jabes's brother John. They received land through the Peters colony after their arrival from Pennsylvania before 1850. The Houston and Texas Central Railway built through the area in 1873, and a railroad switch was located in the community. It was called Summit because at 810 feet above sea level it was supposed to be the highest point between the Red River and the Gulf of Mexico. In 1873, when Summit received a post office, two businesses were located at the switch: a general store and a saloon. Several houses were built to the east of the switch. Jabes Haning persuaded the railroad to establish a depot on his land by donating every second lot in his newly platted town to the railroad. The name of the depot, the store, and the post office was changed in 1876 to Howe, after F. M. Howe, who worked for the Houston and Texas Central. Howe had three saloons until around 1900, when the town voted to go dry. Its first one-room school building opened in 1877 and was replaced by a two-story building in 1884.
In 1884 Howe was incorporated, with George M. McCrary as mayor. By the late 1880s the town had become a major grain-shipping center and was the home of Red Rust-proof Oats. A number of seed companies had their beginnings there in that decade. Howe became home to a Farmers' Alliance Cooperative Association, which was absorbed by the Howe Grain and Mercantile Company in 1894. In 1890 Howe had a population of 450, a steam gristmill, a Farmers' Alliance Cooperative, and Baptist and Methodist churches, as well as a number of hotels, doctors, druggists, and barbers. Several newspapers were published in Howe, such as the Messenger and the Howe Herald in the early years. During the 1930s the Howe Chronicle was published by former Governor James E. Ferguson and his brother A. M. Ferguson. The Howe Enterprise was established in 1963 by A. P. "Pop" Sloan, and continues to be published online under the ownership of Grayson Publishing, LLC. By 1914 the Texas Traction Company, better known as the Interurban, was providing service to Howe. This electric train ran between Denison and Dallas with a stop in Howe. By 1914 Howe also had the Farmers National Bank, the Howe Herald, three grain elevators, and an ice plant. The community's population had grown from 521 in 1904 to 680 in the early 1960s. After that it rose rapidly through the early 1980s, reaching 2,173 by 1990. By 2000 the population was 2,478. Throughout throughout most of its history Howe remained primarily an agricultural center, some oil has been produced in the area. During the early 1980s Howe reported some thirty businesses. In 1981 local industries included a shirt manufacturer and a hydraulics company, and by 1991 the number of manufacturers at Howe had risen to five, including makers of plastics, electronics, and agricultural equipment.