[1] The Observer is published bimonthly by a 501(c)(3)[2] nonprofit organization, the Texas Democracy Foundation.

[5] The Observer was founded by Frankie Randolph and Ronnie Dugger in Austin in 1954 to address topics often ignored by daily newspapers in the state, such as those affecting working people and concerning class and racism.

During this period, the Observer was critical of conservative or moderate Texas Democrats, including Lyndon B. Johnson during his Senate tenure and Governors Allan Shivers and John Connally.

[10][11] In March 2023, the board of the Observer's parent organization, the nonprofit Texas Democracy Foundation, voted to close the publication and lay off its 17 employees, including 13 journalists.

[4] A crowdfunding campaign to save the publication raised over $300,000 in two days, spread mostly through word of mouth via Mastodon.