Marble Falls is on the Colorado River at the intersection of U.S. Highway 281 and Farm Road 1431, thirteen miles southeast of Burnet in southern Burnet County. The falls for which the town was named were used as a landmark by travelers and were referred to as the "great falls" or the "marble falls" of the Colorado River as early as 1817. Charles S. Todd made an effort to establish a town at the falls in 1854. Several lots were sold, but few people built homes there. "Todd's village" faded before it ever really got started, and Todd's land was sold for taxes in 1880. Adam Rankin Johnson saw the falls in 1854 and also wanted to build a city at the site. His project remained a dream, however, until the 1880s. Although there was some difficulty in establishing a clear title to the land, by 1886 Johnson had succeeded in buying one-half and controlling the rest of the original Baker grant, which included the falls area. The Texas Mining and Improvement Company was chartered in June 1887; Johnson and nine others were listed as owners. It handled the business of the new town for several years. Town lots were advertised for sale in July. The Austin and Northwestern Railroad built an extension to Marble Falls from Granite Mountain in 1889. A post office was also established that year with Robert Charlton as postmaster. By 1890 the community had Methodist and Baptist churches, a cotton gin, a gristmill, a tannery, a shoe factory, three general stores, a hotel, a weekly Gazette, and 400 to 600 residents. Population estimates reached 1,800 by 1896. Marble Falls Alliance University was chartered in 1892, but it was in operation only a few years; its facilities were purchased by the public schools when an independent school district was established in 1908. The first city officials were elected in 1907, when a mayor-alderman form of government was instituted. In 1917 the all-male voting population of Marble Falls elected Orphelia (Birdie) Crosby Harwood the first woman mayor in the United States. Some improvements to the city, such as paved streets and electric street lights came in the late 1920s; others, such as sewer systems, had to wait until after the Great Depression and World War II.
The potential of the Colorado River falls as a source of power was seen by Johnson when he first arrived at the site in 1854, but it was many years before his dream was actually realized. Plans were made to harness the river at the Marble Falls site in 1871; the legislature authorized the building of a dam near Marble Falls to power a milling and manufacturing establishment, but nothing came of the project. The Marble Falls Cotton and Woolen Mills Company built a factory in 1895, but was unable to raise capital to purchase necessary machinery. A dam project was begun on the Colorado River below Marble Falls in 1910, but was not completed. Finally, in 1925 a dam was built to supply electrical power to the Marble Falls Textile Mills Company; the facility was used by Insull Companies in 1935 to supply power to the Hamilton Dam project. Max Starcke Dam, which formed Lake Marble Falls, was constructed in the early 1950s. Unfortunately, the natural falls were destroyed by the formation of the new lake, but the Marble Falls community benefited from the increased recreational and municipal water supply. Marble Falls served as the principal commercial center for numerous subdivisions and resorts that were built along the lakes after the 1960s. Population estimates for Marble Falls hovered around 1,000 during most of the first half of the twentieth century; after the late 1940s and early 1950s, however, the number of residents increased steadily. In 1940 the population was 1,021; by 1960 it was 2,161. As more people moved to the area to take advantage of lakeside subdivisions, the population and the supporting commercial center grew accordingly: Marble Falls had 2,209 residents and ninety-four businesses in the early 1970s, 3,252 residents and 210 businesses in the early 1980s, and an estimated 4,007 residents and 218 businesses in 1990. By 2000 the population reached 4,959 with 817 businesses.