The Villa de San José de Palafox (Palafos, Palafoz) was an unsuccessful settlement on land that the Spanish crown granted to Mexican settlers during the early nineteenth century. According to documents once contained in the Spanish Archives of Laredo, Joaquín Galán received a royal land grant in Coahuila sometime prior to 1804. Galán's tract was located on the Rio Grande in what is now Webb County, halfway between Laredo and San Juan Bautista Presidio. In December 1804 Galán granted power of attorney to his son Juan, who in April 1805 turned the property over to Manuel Garza. Garza resided on the property until April 1810, when Manuel Antonio Cordero y Bustamante, in accordance with the wishes of the Spanish king, condemned a large tract of land that included Garza's property in order to establish a new town. As compensation, Garza received another tract of land adjoining the condemned property. The Spanish government then ordered the establishment of a new town on the margin of the Rio Grande. It was named Palafox, in honor of a Spanish general, Francisco de Palafox y Melci, who won distinction opposing Napoleon's forces in Spain. Juan José Díaz was to administer justice and distribute land to settlers, mostly families from the older settlements of Coahuila, though no money was available to fund the construction of public buildings. The settlers themselves built a church in the center of town. The townspeople prospered by raising livestock, especially sheep and goats, and the town grew from almost 240 inhabitants in 1815 to 277 by the end of 1816.
The townspeople, however, soon faced the possibility of depredations by Indians, predominantly Comanches. Though the Palafox documents give no indication of fear or panic, they do reveal an awareness of the need to be well armed. In April 1813 Capt. José Manuel García lamented the attacks of "barbarous indians . . . the theft and pillage which they commit," the deaths they cause. Indians burned the village in 1818. Some families had returned by 1824, and in 1826 sixty soldiers were ordered to Palafox to build barracks, but the town was finally destroyed in 1829, with the massacre of most of its inhabitants. Attempts were made to restore it under the name of Houston in the 1840s, but by 1850 the name Palafox was again in use. The Palafox, Burkeville, Sabine and Rio Grande Railroad, chartered in 1854, was never built. In the 1880s there were two large stores, the Cantú and Alexander stores, at the site; a post office operated from 1886 to 1887 and again from 1905 to 1922. A map drawn by William Sydney Porter in 1888 shows Palafox with no roads leading to it and no adjoining settlements. The 1910 census listed forty inhabitants. Jack Walker, the settlement's last inhabitant, left in 1938. Ruins of numerous stone buildings, a cemetery, and an irrigation system built in the 1920s remained in 1990. In 1973 the site was added to the National Register of historic Places under the name San José de Palafox Historic-Archeological District.