[4] Lovelady was founded by investors of the Houston & Great Northern Railroad as a railway line was built through a land grant of Cyrus Lovelady, near the communities of Nevil's Prairie, Pennington, and Weldon.

The town soon had livery, stables, blacksmith shop, and hotels, prospering as both a marketplace and a shipping point.

Texas State Highway 19 runs through the center of town as Commerce Street, leading north 14 miles (23 km) to Crockett, the county seat, and south the same distance to Trinity.

The climate in this area is characterized by hot, humid summers and generally mild to cool winters.

[6] As of the 2020 United States census, there were 570 people, 349 households, and 154 families residing in the city.

Lovelady is perhaps best known for the Texas Department of Criminal Justice – Eastham Unit, a medium security penitentiary housing some 2,400 inmates for various offenses.

[11] Eastham Unit, a Texas Department of Criminal Justice prison for men, is located in unincorporated Houston County, southwest of Lovelady.