Johnson and Henry King built a gristmill, and residents started referring to the community as Caddo Mills after the facility.

In 1886, the Missouri, Kansas and Texas Railway (MK&T) built a line through the town, and the population increased to 500.

[5] Caddo Mills is located in Northeast Texas at the western edge of Hunt County.

[4] West Caddo Creek, part of the Sabine River watershed, flows through the southwestern corner of the city.

[10] The city is served by the Dallas, Garland and Northeastern Railroad, which operates the former MK&T line.