Loebau is on West Yegua Creek three miles east of Lincoln in central Lee County. It developed after the Civil War, near the Bluff Creek Crossing of West Yegua Creek on the Giddings-to-Caldwell road. A cotton gin owned by Milton G. York, Sr., began operating there in the 1880s. In the late 1880s and early 1890s there was a large influx of German settlers to the area. German Lutherans organized a church and a school in 1892. A post office under the name Loebau opened in 1898 and operated until 1906. It reopened briefly in 1915 but closed again the next year. Around 1900 a Mr. Mitschke bought the cotton gin and added a sawmill. He supplemented his income by manufacturing and selling patent medicine. A new one-room school building was built in 1923. During the 1930s the town had the Lutheran church, the school, and a few scattered dwellings. The school was annexed by the Dime Box public school in 1950. Loebau is known for its petrified forest and for its Indian artifacts, which include pottery, axes, spearheads, and other implements. In 1990 the community had a reported population of twenty. The population remained unchanged in 2000.