Port Isabel is on the point where Texas Highway 100 meets the Laguna Madre in southeastern Cameron County, sixteen miles northeast of Brownsville. It is connected to South Padre Island by the two-mile-long Queen Isabella Causeway (Park Road 100). The first settlement in the area, Brazos Santiago, was on nearby Brazos Island. In 1788 water sellers traveled to the area to obtain water. The site was also used as a summer resort by 1800. Jean Laffite is said to have had a fifteen-foot well dug near the site of present Laguna Vista, five miles northwest of Port Isabel. Official claim to the land was not made until 1828, when it was granted to Rafael García as part of the Potrero ("Pasture") de Santa Isabel. During the 1830s a small community developed at the site, known as El Frontón de Santa Isabel. Later that name was changed to Punta de Santa Isabel, that is, Point Isabel. A post office was established in the community under the name Point Isabel in June 1845. The name of the post office and community were changed to Brazos Santiago in 1849, when the Oblates of Mary Immaculate arrived in the community and established Our Lady by the Sea Church. Also that year the community suffered an outbreak of cholera, and it was several years before it recovered fully. In 1850 Port Isabel was the second largest town in the area, which by 1859 was exporting $10 million dollars worth of cotton annually. The Port Isabel Lighthouse was built in 1853 at a cost of $7,000; it served as a lookout during the conflict with Juan N. Cortina known as the Cortina War. During the first three years of the Civil War Port Isabel was known as a haven for blockade runners due to its proximity to Mexico. All the ships in the harbor were destroyed or captured during a Union attack on May 30, 1863. The first railway in the area was the Rio Grande Valley Railway, a narrow-gauge line connecting Port Isabel to Brownsville, funded and built by Simón Celaya of Brownsville, which began operation in 1872. The name of the post office was changed from Brazos Santiago to Isabel in 1881.
In 1904 the town had one school with two teachers and eighty-one students. In 1915 the community officially became Point Isabel. From 1925 to 1927 the estimated population was 200. The town was incorporated as Port Isabel on March 23, 1928. That year a shallow-draft channel was dredged around the south and west sides of the town. Also in that year, the Rio Grande Railroad was acquired by the Port Isabel and Rio Grande Valley Railway. By 1929 the population had reached an estimated 750. In 1930 the post office changed its name to Port Isabel. The Point Isabel Press was in operation from the 1920s into the 1930s, after which it was the Port Isabel Press. On July 3, 1930, the River and Harbor Act authorized the expansion of the Port Isabel harbor through the Brazos Island harbor project. In 1933 the ship channel was dredged to a depth of twelve feet and a width of 125 feet. That year Port Isabel had an estimated population of 1,177 and forty-five businesses. In 1934 the first annual Texas International Fishing Tournament was held in Port Isabel by the International Game and Fish Association. The first modern use of Port Isabel as a seaport occurred on July 27, 1935. In 1937 a six-foot channel was dredged from Port Isabel to a point two miles east of Harlingen. In 1941 the Port Isabel and Rio Grande sold its track connecting Port Isabel to Brownsville to the St. Louis, Brownsville and Mexico Railway. The channel connecting Port Isabel to Harlingen was full of silt by 1942 and was no longer in use. In 1952 the community had a population estimated at 2,372 and seventy businesses. By 1956 Port Isabel was served by the Missouri Pacific Railroad.
The Gulf Intracoastal Waterway, completed during the 1950s, increased trade and improved the economic health of Port Isabel, but it also caused problems. A spoil bank from its construction polluted the community, and the city's board sought the assistance of the United States government to solve the dust problem. The Queen Isabella Causeway, with a swing bridge across the ship channel between Port Isabel and South Padre Island, was completed in February 1954 at a cost of $2.2 million. The causeway drew tourists to the area. The Naval Auxiliary Air Station was commissioned on April 1, 1957. The estimated population of Port Isabel was 5,300 in 1958. The shrimping industry contributes significantly to the local economy. In 1960 Port Isabel harvested 7,136,000 pounds of shrimp and served as a gateway into South Texas and northern Mexico. The port, equipped for all types of export and import tonnage, handled 444,627 short tons that year. In 1966 Hurricane Beulah devastated 15 to 20 percent of the town, and another 25 percent required major repairs. That year Port Isabel had an estimated population of 4,000 and 122 businesses. During the 1960s, forty-one million pounds of shrimp annually, 65 percent of the state's production, came from the area. At the annual Shrimp Fiesta held in Port Isabel, among the many ceremonies is a Blessing of the Fleet. The area is also supported by other commercial fishing, tourism, and the petroleum industry. Among the larger businesses in the 1960s were a chemical refinery, a pipeline-service company, shipyards, and a frozen-food company. In 1978 the Port Isabel Ship Channel had been dredged to thirty-six feet in depth and 200 feet in bottom width. It was 7,144 feet long and had a turning basin thirty-six-feet deep by 1,000 feet wide. During the middle to late 1970s the population fluctuated between an estimated 3,067 and 3,740. The new Queen Isabella Causeway was constructed in 1974 and replaced the original Queen Isabella Causeway, which became known as the Old Fishing Pier. In 1980 Port Isabel had an estimated population of 3,603 and 155 businesses. During the 1980s the town continued to attract tourists. Recreational opportunities included fishing, boating, and hunting. In 1989 the port handled 263,335 short tons of cargo. In 1990 Port Isabel had a population of 4,467 and a school, although the number of businesses had declined. The town continued to support itself from the shrimping and fishing industry as well as the tourist industry. In 2000 the population was 4,865.