The first major U.S. federal highway in early territorial Florida, Bellamy Road, was constructed in the 1820s–1830s and passed through Waldo from around Lake Santa Fe to the east and on towards the Santa Fe River in the west, where it passed over the river on a natural land bridge at modern O'Leno State Park.

Senator David Levy Yulee, president and chief stockholder of the Florida Railroad, made the decision to build the Cedar Key branch first.

The section up to Gainesville was completed by 1859, with the intersection of Bellamy Road and the Florida Railroad named Waldo Station, after Senator Yulee's friend, Benjamin Waldo, a doctor and politician.

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

As of the 2020 United States census, there were 846 people, 538 households, and 154 families residing in the city.

[10] As of the 2010 United States census, there were 1,015 people, 348 households, and 196 families residing in the city.

[17] In August 1995, the American Automobile Association (AAA) declared Waldo, and the neighboring city of Lawtey, as "speed traps" and urged motorists to choose alternate routes instead of driving through the two cities.

[23] The former chief of the disbanded Waldo Police Department was cleared of any wrongdoing after an investigation by the Florida Criminal Justice Standards & Training Commission (CJSTC).

In a letter to the Waldo City Manager, the CJSTC wrote, "The decision is based upon the finding that insufficient grounds exist under the guidelines of Chapter 943.1395, Florida Statutes, to pursue any disciplinary action by the commission.

"[24] This event led to then-Florida Governor Rick Scott to sign a bill (SB 264) which better defined the ban on ticket quotas.

[26] In August 2018, the AAA officially lifted the designation of "speed trap" for the city of Waldo.