Freeport was officially founded in November 1912 by the Freeport Sulphur Company. The population was 300. However, by 1929, that population had grown to 3,500, and to 4,100 by 1939, influencing a steady increase of economic expansion in Freeport.
By 1937, a Freeport School District had been established, consisting of several segregated schools and twenty-seven teachers. There were two white schools, one black school, and a high school.
Freeport's most substantial economic growth began with the construction of Dow Chemical Company facilities in the city during 1939. This company still provides most of the economic resources of the community. It is the company's largest single site today.
In July, 1957, Freeport merged with Velasco, Texas, which had been a temporary capital of the Republic of Texas during the 19th century. Soon thereafter, Freeport's population numbered 11,619. In 2003, the city annexed nearby Bryan Beach.