The city of Houston in the U.S. state of Texas was founded in 1837 after Augustus and John Allen had acquired land to establish a new town at the junction of Buffalo and White Oak bayous in 1836. Houston served as the temporary capital of the Republic of Texas. Meanwhile, the town developed as a regional transportation and commercial hub. Houston was part of an independent nation until 1846 when the United States formally annexed Texas. Railroad development began in the late 1850s but ceased during the American Civil War. Houston served the Confederacy as a regional military logistics center. The population increased during the war and blockade runners used the town as a center for their operations.

Investment and development of railroads serving Houston increased the transportation options for freight and passengers while greatly increasing the number of jobs. The city limits extended to an area north of Buffalo Bayou after the American Civil War. Houston continued as an important business, social, and economic center of Texas, while establishing the first State Fair starting in 1870 and continuing through 1878.

The population surpassed 58,000 in 1900, the same year as the Great Hurricane struck Galveston. Within a few years, oil companies were establishing offices in Houston to administer oil fields in East Texas. In 1912, the Rice Institute opened its doors on its suburban campus, the first institute of higher learning in the Houston area. Several tall buildings were completed that year, including those used for offices and residences. Tax Commissioner Joseph Jay Pastoriza gained national notoriety for his property tax reform, though it was later invalidated by the Texas Supreme Court. Around this time Houston started drawing immigrants from Mexico, a trend continuing into the 1920s. Many settled in the Second Ward. During this period, the city developed Hermann Park. Houston gained national prominence when it hosted the Democratic National Convention in 1928.

The region known as Houston is located on land that was once home of the Karankawa (kə rang′kə wä′,-wô′,-wə) and the Atakapa (əˈtɑːkəpə) indigenous peoples for at least 2,000 years before the first known settlers arrived. However, the land remained largely uninhabited from 1700s until settlement in the 1830s.

On the heels of the Texas Revolution, two real estate promoters who had arrived in Texas in 1832, John Kirby Allen and Augustus Chapman Allen, were seeking a new town site within the Galveston Bay navigation system. They had invested in Galveston already, but they continued to make offers for other tracts in the region. They bid on land at Morgan's Point and Harrisburg before settling on the eventual Houston site. On August 26, 1836, they purchased half a league of land, or about 2,214 acres (896 ha) from Elizabeth (Mrs. T. F. L.) Parrot, John Austin's widow for $5,000. Four days later, the Allen brothers placed an advertisement in the Telegraph and Texas Register for the paper town of Houston. Gail Borden and his assistant Moses Lapham conducted preliminary surveying work in October, taking field notes and laying stakes. Meanwhile, John Allen was back in Columbia lobbying members of Texas Congress to designate the not yet surveyed town and promising to construct government buildings. On November 30, a special joint session of Congress considered fifteen possible locations for the next seat of government. On the first ballot, ten of these locations garnered votes, but Houston gained a majority of votes on the fourth ballot.

The Allen brothers chose a site at the confluence of White Oak Bayou and Buffalo Bayou, which served as a natural turning basin, now known as Allen's Landing. The Laura, the first steamship ever to visit Houston, arrived in January 1837, at which time the town totaled twelve residents and one log cabin. Four months later there were 1,500 people and 100 houses. Critical to the promotion of Houston by the Allen brothers was the importance of its location as a natural logistical center. They claimed that the town lay at the "head of navigation" on Buffalo Bayou. Their critics cast doubt on the navigability of Buffalo Bayou as far upstream as Houston, who had not been convinced by the arrival of the Laura. A true test would be a larger ship making the trip. The Allen brothers commissioned the 262-ton Constitution to travel to Houston. Captain Edward Auld piloted the large, deep-draft steamer to the wharf at the foot of Main Street, and earned $1,000 for performing this task. However, the Constitution—measuring at 150 feet—was too long to make the three point turn using the mouth of White Oak Bayou. Unable to turn the ship around at Houston, Auld ran the engines in reverse for over six miles until he found a natural turning basin. The Allen brothers published an announcement of the Constitution's feat with the headline "The Fact Proven".

In May 1837, the Texas Congress met for the first time in Houston. The First Texas Congress had initially convened in Columbia, Texas, but adjourned the first session on December 22, 1836. The First Congress reconvened in Houston to finish its business five months later. Houston was granted incorporation by the Texas legislature on June 5, 1837. At this time, drunkenness, dueling, brawling, prostitution, and profanity began to become a problem in early Houston. Soon, Houstonians were prompted to put an end to their problems; so, they wanted to make a Chamber of Commerce just for the city. A bill had been introduced on November 26, 1838, in Congress that would establish this entity. President Mirabeau B. Lamar signed the act into law on January 28, 1840. This move could not have come sooner, as the city was suffering from financial problems and numerous yellow fever outbreaks, including an 1839 outbreak that killed about 12 percent of its population. Also, on January 14, 1839, the capital had been moved to Austin, known as Waterloo at the time. On April 4, 1840, John Carlos hosted a meeting to establish the Houston Chamber of Commerce at the City Exchange building. E.S. Perkins presided as its first president. In addition to Perkins and Carlos, the charter members admitted were: Henry R. Allen, T. Francis Brewer, Jacob De Cordova, J. Temple Doswell, George Gazley, Dewitt C. Harris, J. Hart, Charles J. Hedenburg, Thomas M. League, Charles Kesler, Charles A. Morris, E. Osborne, and John W. Pitkin. Undergrowth and snags had been the greatest obstacle to navigating Buffalo Bayou; yet by 1840, there was an accumulation of sunken ships. This was the principal concern of the new Houston Chamber of Commerce. The city of Houston and Harris County responded by allocating taxpayer money for bayou clearance, and on March 1, 1841, the first wreck was pulled out the bayou under this program.

The original municipal government structure was a mayor and eight aldermen, all elected at large. Two charter amendments, one in 1839 and the other in 1840, divided the town into four wards, using Main and Commerce streets as axes. Each ward elected two alderman under this system. The wards are no longer political divisions, but some of the names are still used, even though they do not refer to the original boundaries.