In the 1840s and 1850s, acreage originally part of the George T. Walters Survey belonged to many absentee landowners, including Sam Houston. In 1887 John R. Jones, a merchant from nearby Goshen, and his wife Joella platted and developed a town called "Lawn City" one mile northeast. A post office was soon established and the name changed to "Lawndale." In 1900, when the Texas and New Orleans Railroad bypassed Lawndale on its route from Kemp to Athens and ran through the northern part of the Mason-Eubank Ranch, the owners, Thomas H. Eubank and G.W. ("Dodge") Mason, set aside one square mile of their holdings for a town. The name "Mabank" was formed by combining the names of the two landowners. Lawndale families and merchants began moving to Mabank, which grew rapidly with a park, depot, stock loading pens, a gin, post office, cafe, hotel, and several mercantile businesses. Later, church lots were set aside for Baptist, Methodist, and Presbyterian congregations, and the Baptist church erected a building for a community house and school. The area's economy depended first on farming and later on ranching, and the 1966 development of Cedar Creek Lake strengthened the community.