Madisonville is at the junction of State highways 21 and 90, U.S. highways 75 and 190, and Interstate Highway 45, on Town Creek in central Madison County. It was founded in 1853 as the county seat of the newly organized Madison County. Sale of lots began in the summer of 1853 on a 200-acre tract of land donated by Job Starks Collard, who had settled in the vicinity during the 1840s in what was then northern Montgomery County. At the suggestion of Dr. Pleasant Williams Kittrell, another early resident of the area, the town, like the new county, was named in honor of President James Madison. The site was chosen due to its proximity to the geographical center of the county and the availability of fresh water from a stream-fed lake northeast of the townsite. The first courthouse, made of logs, was constructed on a large square in the center of the settlement in 1854, and a post office was established the same year. By 1870 the town had developed into an agricultural trade center with a population of ninety-eight, including nine Black residents. A company of State Police was posted there in the early 1870s. The first Black school in the community was constructed in 1880. By 1884 Madisonville had a steam-powered gristmill and cotton gin, four churches, two schools, and an estimated population of 200. Allen Academy, the oldest boys' preparatory school in the state, was founded there in 1886 as the Madison Academy and remained in operation for thirteen years before moving to Bryan in 1899. The first Black church in Madisonville was erected in 1888. By 1890 the community had seven general stores, a saloon, the Watchman (published by J. P. Nall), and a population of 418. In 1894 a stately brick courthouse replaced the earlier wooden structures, and a second weekly newspaper, the Meteor, was founded the following year. By 1896 the population had risen to an estimated 700, and 187 White and 68 Black pupils were enrolled in the two local schools.
In 1903 the International-Great Northern Railroad completed a branch line from Navasota to Madisonville. In 1904 Madisonville had an estimated population of 833; the figure climbed to 1,079 in 1925 and 1,294 in 1930, when the town had ninety-five businesses. The first paved roadway, State Highway 90, was constructed in 1929, and State Highway 21 and U.S. 75 were completed in the early 1930s. Thereafter, truck and bus transportation progressively supplanted rail traffic, until the International-Great Northern was forced to abandon its Navasota-Madisonville line in 1944. The Civilian Conservation Corps maintained a camp on the western edge of town from 1935 to 1941. In 1935 there were 467 White and 129 Black pupils enrolled in the two schools of the Madisonville Independent School District. By 1940 the town's population had grown to 2,095. Although many residents left during World War II in search of defense-related employment in Houston and other metropolitan areas, population growth was sustained by an influx of Blacks from rural portions of the county; Madisonville's Black population surged from 142 in 1940 to 927 in 1948, and by 1950 the overall population had risen to 2,393. After this influx subsided, however, the town's population declined slightly over the ensuing decade before growth resumed in the late 1960s.
Although it remains a center of agricultural trade, Madisonville has diversified economically since the end of World War II and witnessed the establishment of a variety of local industries. Construction of Interstate Highway 45 through the eastern reaches of the community in the early 1960s helped to integrate the town into the national economy. During the 1970s Ralston Purina operated a mushroom-processing plant near the town; in the early 1980s this facility was purchased by Monterey Mushrooms and employed 400 people. Development of a 110-acre industrial park in the early 1970s attracted new business to the area, and production of petroleum has benefited the economy in the county since 1973. Despite a slump in the 1980s, oil and gas field servicing remains among the town's most important industries. By 1970 the population had increased to 2,881. It climbed to 3,660 in 1980 and reached an estimated 4,107 in the late 1980s. In the early 1990s, however, it was reduced somewhat by economic recession, so that by 1992 it stood at an estimated 3,569. At that time the town's public facilities included a hospital, a nursing home, a library, a radio station, a municipal airport, four public schools, and twenty-one churches. In 2000 the population was 4,159. The picturesque Woodbine Hotel, built in 1904 and restored in the late 1970s, was recognized as a state historic landmark in 1982 and is on the National Register of Historic Places. The annual Sidewalk Cattlemen's Association Celebration in June attracts visitors from throughout the state.