On October 27, 1888, Tom Bean was founded on what was then a new branch of the Cotton Belt Railway between Commerce and Sherman, Texas.

Within a few years, it boasted a grain company, a furniture company, a drugstore, a newspaper called the Tom Bean Bulletin, a saloon, a dance hall, a movie theater, a justice court, a jail, and the Tom Bean social club.

As time progressed, the sharp increase in automobile travel and transport, and the decline of cotton as the principal crop of the area, led businesses to the larger cities of Denison and Sherman, the county seat.

Though never again the railroad boomtown of the late 19th and early 20th centuries, the community enjoyed a growth spurt in the 1950s and 1980s, celebrating its centennial in 1987.

According to the United States Census Bureau, the city of Tom Bean has a total area of 1.6 square miles (4.1 km2), all land.