Located in southeastern Collin County, Lavon drew settlers in the 1850s because of the rich soils of the Blackland Prairie and the water of Bear Creek. Elbert C. Thompson came to the area in 1854, and others soon followed. Lavon began when the St. Louis and Southwestern Railroad came through the county in 1886. Its first post office opened in 1888 with Elbert Thompson as postmaster. The town was first known as Thompson or Thompson Switch after Thompson, who also owned a general store, but to avoid confusion with another town named Thompson, it was renamed Lavon for his son, Bud O. Lavon Thompson. Early businesses included a depot, meat market, general store, restaurant, and barber shop. A bank building went up in 1907, and the home of Civil War veteran James L. Rees and Miranda Rees was moved down the street to make room for it; that house still stands as Lavon's oldest home. Before a church was built, a two-story brick schoolhouse served for worship. Lavon Presbyterians organized in 1897 and built a church that served the whole community, with denominations alternating Sundays there until the late 1940s. From 1938 to 1940, a school building was constructed under the Works Progress Administration. In the 1950s, the creation of Lavon Dam made the area a popular resort spot for fishermen and boating enthusiasts. Over the years, Lavon had a number of businesses, including a restaurant where scenes for the 1967 film Bonnie and Clyde were shot, and the town incorporated in 1972.