Founded in 1840, Caldwell has been the seat of two counties. Before Burleson County was organized in 1846, Caldwell was the seat of Milam County. It was named for Mathew "Old Paint" Caldwell, a noted frontiersman and signer of Texas Declaration of Independence. In the 1850s, the town was a rendezvous for west-bound immigrants, and had one of finest hotels on Old San Antonio Road. One of state's best country inns is still located in Caldwell.
Today, the city is primarily a rural trade center for surrounding farms and ranches with diversified industry, including manufacturing service and technology. Caldwell has been named "Kolache Capital of Texas" by the state legislature, and is on the Presidential Corridor linking the George Herbert Walker Bush presidential library in Bryan/College Station with the Lyndon Baines Johnson Library in Austin.
Caldwell lies on Texas 36, a segment of the Ports to Plains Highway connecting the state's heartland to coastal ports. Bed and breakfast accommodations are offered in some of the historic buildings.