The Village of Salado was founded at the Old Military Road crossing of Salado Creek on October 8, 1859 coincident with the founding of Salado College. Many of the leaders of Bell County had felt the need for the establishment of a fine school and very quickly Salado became a viable settlement.
It developed both as an industrial and agricultural center with a gristmill within the town limits and 7 other mills within 9 miles on Salado Creek. The first Grange in Texas was organized here in 1873, and Salado ranked second in size and importance in the County until the early 1880s. Salado College attracted residents of education and refinement and gave prestige to the village. It operated until 1885 with only the tuition of the students for support. From 1890 to 1913, a fine private school, Thomas Arnold High School, occupied the old stone college building.
In 1884, Salado boasted of 7 churches, 14 stores, 2 hotels, 2 blacksmiths, and 3 cotton gins. After the railroads were built to the north and east of Salado, the newly created towns drew most of the trade from here and Salado steadily declined. Population dwindled from 900 in 1882 to 400 by 1914 and only slightly over 200 in 1950. Since that time, Salado has grown slowly and is recognized as a very pleasant place to live and work. Eighteen of the old buildings here are listed on the National Register of Historic Places, and Salado has 23 Texas Historical Markers. The churches and organizations are carrying on the proud tradition of the Salado Masonic Lodge, which provided 2 Grand Masters for the Texas Lodge in the late 1800s. Salado is honored to have had a Rhodes Scholar among the graduates of Thomas Arnold School.
The Chisholm Trail came right up Main Street, and the stage lines that served Central Texas included Salado among their stops. A wire cable suspension bridge, the first bridge built in the county, was built here in 1869 and stood until the great flood of 1900. Salado Creek has always been a mighty force in the history of this area and it was designated the first recorded Natural Landmark in Texas in 1966.
The revitalization of Salado began in the 1940s as the fame of the dining room of Stagecoach Inn spread. It continued with the founding of the Central Texas Area Museum in 1959 and the construction of the first new residential area, Mill Creek, in 1960. The many shops catering to visitors have led to the popularity of Salado. Today Salado has approximately 130 businesses of many kinds, adding to the charm of this small village.