Market town for rich agricultural area, on one of this state's earliest railroads (chartered 1841 by the Republic of Texas). Situated on land granted in 1840s to rancher William A. Faires. Germans began to settle here in 1860s, and soon needed a shipping point for their products. Sailing master Friedrich Wilhelm Flato (1820-1899) and his wife Sophie, of the German Colony, had a store about 2 miles south of here. In the 1870s, Czech immigrants arrived, and the Galveston, Harrisburg & San Antonio Railroad (delayed by Civil War, 1861-65) was built to this point. John Cline, F. W. Flato, John Lattimore, and railroad president T. W. Pierce founded Flatonia on Oct. 16, 1873, naming it for the Flato family.
At the same time, adjacent landowners Anton Freytag and James Faires platted Freytag and Faires' additions to the town. Post office opened in 1874. Town was incorporated Nov. 8, 1875. Soon it had churches, a school, cotton gins, a newspaper (The Flatonia "Argus"), a cottonseed oil mill, and other businesses. A casino was built for political gatherings, dances, dramas, and other uses. In 1886, a second railroad, the San Antonio & Aransas Pass, reached here. Throughout its first century, the town has remained industrious, thrifty, and stable.