Lorena is on Interstate Highway 35 and U.S. Highway 81, thirteen miles southwest of Waco in southern McLennan County. Settlers began arriving in the area in the 1850s. The townsite was laid out in 1881, when the Missouri, Kansas and Texas line was being built between Hillsboro and Taylor. The community was named in honor of Lorena Westbrook, the daughter of a prominent local family. A post office was established at Lorena in 1882 with Charles F. Schaefer as postmaster. In 1884 the community had a general store, two grocery stores, and 150 residents; area farmers shipped cotton, corn, and livestock. By 1890 Lorena had grown to include a hotel, a school, a steam cotton gin and gristmill, two churches, three general stores, and 250 residents. Population estimates rose to 375 in 1892 and to 500 in 1896, and a wide assortment of businesses prospered there.
Over the course of about thirty-five years, residents of the Lorena area supported several small banks that specialized in farm loans. A private bank was established in Lorena in 1894; it was reorganized as Lorena State Bank in 1909. A second bank, called the First National Bank of Lorena, was established in 1914. The two banks were consolidated in 1922 and continued to operate as the First National Bank until closing in 1928. Efforts to reorganize the national bank ended in 1931, and its assets were liquidated. Though the population of Lorena was reported as 342 throughout the 1930s and most of the 1940s, between 1933 and 1945 the number of rated businesses there fell from twenty-two to seven. Lorena's population estimates fell to 242 in the 1950s. The local economy received a boost in the late 1950s and early 1960s, when Interstate Highway 35 was built along U.S. 81. The community, which incorporated in 1959, began to grow. Some families moved there from Waco, finding it pleasant to live in a smaller town and commute to work in the city. Lorena had an estimated 437 residents and nine businesses in the mid-1960s, 516 residents and twenty-two businesses in the mid-1970s, and 745 residents and thirty-four businesses by the late 1980s. In 1990 Lorena reported a population of 1,158 and eighty-two businesses. The population grew to 1,433 and 150 businesses by 2000.