Stephenville is named after John M. Stephen, who settled there in 1854 and donated the land for the townsite laid out by George B. Erath when the county was organized in 1856. In the first two years of its settlement, the townsite was successful; by 1858 the population reached 776.
However the townsite was located in Comanche territory and raids were common. Also the hardships of the American Civil War forced citizens to leave. The population declined until 1871 when it grew after Stephenville became an agriculture and livestock center.