The town of Lakeway was founded on the site of a 2,700-acre ranch owned by Houston oilman and rancher Jack (Jake) Josey.

Flint Sawtelle, John H. Crooker, Jr., and Lee Blocker—obtained a sixty-day option to purchase the land and plan a hotel and resort community.

Around the same time, the Lakeway Land Company was formed, with Flint Sawtelle as president, for the development of real estate.

In June 1974, a substantial majority of resident and nonresident property owners voted to incorporate with the consent of the city of Austin, and the 1,200-acre village of Lakeway resulted.

The City of Lakeway is served by the Lake Travis Independent School District (LTISD).

[17] The Baylor Scott & White Medical Center - Lakeway includes a 200,000-square-foot (19,000 m2) general hospital off Ranch to Market Road 620.

It will have an imaging center with an MRI, CT scanner and X-ray machine; a 16-bed emergency room and heliport; lab services; and an outpatient clinic.

It will also include facilities for cardiovascular treatment, orthopedics, pediatrics, obstetrics and gynecology, general surgery, nephrology and dialysis, and an infusion center.