Preston was a frontier town on the high bluff in the Washita Bend of the Red River, a site near modern Pottsboro, Grayson County. The community grew up around a trading post established by Silas Cheek Colville and Holland Coffee about 1837. The town plat was surveyed by William H. Hunt in 1845. It was long thought that a Capt. William Gilwater Preston accompanied the Military Road expedition of 1840–41 and established a Fort Preston. This now seems in doubt, and the origin of the name is obscure.
The community, known as Preston or Preston Bend, became a ribald, boisterous, and profane frontier town and a frequent destination of Indians seeking liquor. Coffee was murdered there on October 1, 1846. Preston was an important river crossing from its founding until about 1850; an estimated 1,000 wagons crossed there in a single year. Coffee, George Butts, and Sloan Love operated ferries in the area. The settlement was the terminus of the Indian Nation's Texas Road and the beginning of what became the Preston Road. The Shawnee Trail crossed there. By 1851 a municipal government had been established, and Tom Jackson was the first mayor. A Masonic lodge was started in 1852, and a post office was granted in 1856. From 1851 to 1853 the United States Army operated a depot, established under the command of Lt. Thomas C. English, to supply the Fifth Infantry. A Preston Supply Depot soon came, under Bvt. Maj. W. F. Wood. In 1849 Randolph B. Marcy and Lt. Nathaniel Michler passed through Preston. Marcy and John Pope came through in 1854, and Albert Sidney Johnston marched the Second Cavalry by way of Preston in 1855.
As Sherman and McKinney began to develop east of the Preston Road, Colbert's Ferry became the main crossing for the area, and Preston began to decline. The old town was largely abandoned by 1870, although a new Preston community developed more centrally within the bend. Preston remained the center of a rural community through the late nineteenth and early twentieth century. It had general stores, a school system, two churches, and a cotton gin. A post office operated from 1880 to 1914. In the late 1930s the United States Army Corps of Engineers bought all the land in the area, and upon completion of the Texoma Dam a few miles downstream in 1944, the site of Preston was inundated by Lake Texoma. The population was 325 in 2000.