Asleep at the Wheel's first Christmas album received positive reviews from a wide range of critics, who praised the band's "fun" renditions of traditional holiday songs, as well as its original compositions.

[2] Merry Texas Christmas, Y'all was issued on September 30, 1997, as Asleep at the Wheel's only release on High Street Records, a subsidiary of Windham Hill.

AllMusic's Ross Boissoneau wrote that "Ray Benson and company have outdone themselves, with nods to traditional country ... as well as the band's stock in trade, Western swing.

"[1] Similarly, Eric Fidler of The Daily News Journal noted that "The band manages to straddle categories, with a lovely straight-ahead version of "Silent Night" ... a delightfully swinging "Feliz Navidad" ... and novelty tunes such as "Xmas in Jail."

"[7] Brian Wahlert of Country Standard Time called the release "a very enjoyable Christmas album" which "promises to add swing to any Christmas party",[3] the Los Angeles Times added that "The standard-bearers of Western swing music certainly know how to make the holiday spirit bright",[8] and Steve Hall of the Indianapolis Star suggested that "this one's a keeper for your holiday music collection".

A review published in The Cincinnati Enquirer claimed that "The western swing revival band has a great concept here, but unlike AATW's multistar Bob Wills tribute, there's too much emphasis on Ray Benson's monotone vocals.