Otto is near the intersection of Farm roads 1240 and 2603, eight miles northeast of Perry in northern Falls County. Settlement of the area began in the 1850s and centered around two communities known as Needmore and Lonestar. These merged to form Otto when the International-Great Northern Railroad built the section of track from Marlin to Waco in 1901. A post office was established, and the new community was named either for Charles Otto Leuschner, a local landowner, or for Henry Otto Stansbury, a schoolteacher. In 1905 Otto had a two-teacher school for ninety-nine white students and a one-teacher school for fifty-seven black students. By 1914 the community had three churches, a bank, a variety of other businesses, and 250 residents. Its population estimates were as high as 1,000 in the mid-1920s, but the combined effects of the Great Depression and World War II drew a significant number of residents to the cities. By 1941 the population of Otto was listed at 500; two years later it had fallen to 250. County highway maps from the late 1940s showed a school, a church, a post office, and several businesses and residences at the townsite. In 1950 the Otto school district was consolidated with the Mart Independent School District in McLennan County. The Missouri Pacific abandoned the section of track between Mart and Marlin in 1967, depriving Otto of its rail service. The community population fell from 243 in 1964 to eighty-five by 1970; it remained at that level in 1990. By 2000 the population was forty-eight.