[6] Stephenville is founded by and named after John M. Stephen, who settled there in 1854, and donated the land for the townsite laid out by George B. Erath when the county was organized in 1856.

The population then declined until 1871, because the townsite was in Comanche territory and raids were common, and because the hardships of the American Civil War led citizens to leave.

In the 1890s, many of the buildings around the town square were built, Tarleton State University opened, and the community's two newspapers merged to become the Empire-Tribune, which is still in operation.

[7] In January 2008, dozens of people in Stephenville reported seeing patterns of lights in the night sky, which were eventually discovered to have been caused by a military training maneuver.

[10] The F-16s had been engaged in training maneuvers and dropping counter-measure flares used to confuse heat-seeking missiles.

[11] Following news reports of the UFO sighting, "media calls came from all over the world", and local police Constable Lee Roy Gaitan gave more than 100 interviews.

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