Middle Water, on U.S. Highway 54 in central western Hartley County, was first established in 1888 as a division of the XIT Ranch. This division, which derived its name from nearby Middle Water Creek, was used for breeding purposes and was a cull ranch, where undesirable cattle were cut out from other division herds. The town was established as a shipping point on the Rock Island line (see ROCK ISLAND SYSTEM). In 1940 it had one business and a population of twenty-five. By 1984 its population had decreased to ten, due mainly to the proximity of Dalhart, only twenty miles away. In 1990 its population was still reported as ten.