Founded on the banks of the San Marcos River, the area is considered to be among the oldest continuously inhabited sites in the Northern Hemisphere. San Marcos is home to Texas State University–San Marcos, and the Aquarena Center.
Archeologists have found evidence at the San Marcos River associated with the Clovis culture, which suggests that the river has been the site of human habitation for more than 10,000 years. The headwaters of the cool, clear river are the San Marcos Springs, fed by the Edwards Aquifer. The San Marcos Springs are the third largest collection of springs in Texas. Never in recorded history has the river run dry.
In 1689, Spaniard Alonso de Leon led an expedition from Mexico to explore Texas and establish missions and presidios in the region. De Leon's party helped blaze the El Camino Real (later known as the Old San Antonio Road), which followed present-day Hunter Road, Hopkins Street, and Aquarena Springs Drive (the route later shifted four miles to the south; it is now followed by County Road 266, known locally as Old Bastrop Highway). De Leon's party reached the river on April 25, the feast day of St. Mark the Evangelist; the river was thus named the San Marcos.
In 1755, San Francisco Xavier de Gigedo presidio and the missions San Francisco Xavier de Horcasitas, Nuestra Señora de la Candelaria, and San Ildefonso were relocated from present-day Milam County to the San Marcos River at Mission San Francisco Xavier de los Dolores. Historians still debate whether the Spanish settlements were located at the San Marcos Springs or another location. In April 1808, a small group of Mexican families settled at the Old Bastrop Highway crossing of the river, and named the settlement Villa de San Marcos de Neve. The settlers were plagued by floods and Indian raids, and the settlement was abandoned in 1812.
In November 1846 the first Anglos settled in the vicinity of the San Marcos Springs. The Texas Legislature organized Hays County on March 1, 1848, and designated San Marcos as the county seat. In 1851 a town center was laid out about a mile southwest of the headwaters of the river. The town became a center for ginning and milling local agricultural products. The town's most notable founder and early settler was Gen. Edward Burleson, a hero of the Texas Revolution and former vice president of the Republic of Texas. Burleson built a dam on the upper reaches of the river in 1849. The dam powered several mills, including one within present-day Sewell Park.
In 1899, Southwest Texas State Normal School (now known as Texas State University-San Marcos) was established as a teacher's college to meet demand for public school teachers in Texas. In 1907 the private San Marcos Baptist Academy was established, furthering education as an important industry for the town. The demands of World War II forced the town's industry to diversify, and with the emergence of a manufacturing and light industrial sector the town began to experience growth.
In the late 1940s, former Hollywood director Shadrack Graham produced a documentary about daily life in San Marcos as part of his “Our Home Town” series of films that encouraged commerce and civic activity in small communities. The film highlights several local businesses from the era, including Smith's Flowers, Waldrin's Cleaners, Lack's Furniture, and the Palace Movie Theater.
In the 1960s, with the establishment of Aquarena Springs and Wonder World as attractions, the tourist industry became a growing part of the city's economy. By the 1960s what was then named Southwest Texas State University had grown into an important regional institution, and when coupled with the creation of Gary Job Corps Training Center in 1965, education became the largest industry in San Marcos. The remarkable growth explosion of Austin further allowed San Marcos to prosper.
By 1973, San Marcos and Hays County had joined the Austin Standard Metropolitan Statistical Area. By that year the city's population had grown to 25,000 citizens, along with an additional Southwest Texas State University student body of 20,000.
By 1990, the city's population had grown to 28,743 and by 2000 it reached 34,733,and the university now known as Texas State University, boasted a student body of 28,121.
San Marcos was listed in the 2010 Business Week's fourth annual survey of the "Best Places to Raise your Kids."