In 1691 missionaries on the expedition of Don Domingo Teran De Los Rios sighted a lagoon the Indians called Nenocadda, now known as Shipp's Lake on the southern edge of present Smithville. Frederick W. Grasmeyer operated a ferry here on the Colorado River in 1836, and steamboats plied the river from 1845 to about 1865. The village of old Smithville was laid out on 640 acres of land granted to Thomas J. Gazley and Lewis Lomas and stood on the Colorado River in the northeast section of present Smithville, with mercantile stores, dry goods shops, and a Masonic Lodge. In 1876 the first post office was established with John Pride Jones as postmaster. The Taylor, Bastrop and Houston Railroad, later part of the Missouri, Kansas and Texas system, arrived in 1886, and the town relocated along the tracks. Legend says a coin toss decided whether the name would be changed to Burlesonville for Murray Burleson, who gave the land for the railroad depot, but Smithville was retained, apparently in honor of pioneer settler William Smith. The town was incorporated in 1895, with T.C. Collins serving as the first mayor, and today Smithville is a municipality with approximately 3.5 square miles inside the city limits.