The City of Ganado was a ranching community when it was first settled. Most settlers lived near Mustang Creek and traveled to Texana, Victoria and Indianola for supplies.  Jackson County’s “second city,” Ganado was originally known as Mustang Settlement, after nearby Mustang Creek.  Cattle ranching was the primary economic engine and herds were driven to Louisiana for sale and later to Kansas City.  That came to an abrupt end with the coming of the railroad in 1882.  As the story goes, a railroad official looked out the window of a train car and saw a large herd of cattle.  He decided the area should be called Ganado, which means “herd” in Spanish. Thus Ganado was named in 1882.

Scandinavian immigrants bought land and began farming in 1891.  A second wave of immigration brought Germans and Bohemians in the 1880s and 1890s.  Jim McFarland moved his general store from its earlier location on McFarland Creek to a site in town.  After McFarland died, Thomas Babcock-who was also the town’s first postmaster, bought the remaining stock and continued a store in the building.  Babcock’s establishment, later known as the Old Texas House, provided supplies to local ranchers.  Soon afterwards, Babcock also established the first residence and first cotton gin in Ganado.  In 1891 T. N. Mauritz opened the first bank in Ganado.  By 1909 the town had sixty businesses.  When the railroad was built through, Ganado grew almost overnight into a bustling city.  New homes, hotels, and businesses sprang up quickly.  The city incorporated in 1909.

By 1914 the town was thriving with a rice mill and storage facilities, 750 citizens, a school district and a weekly newspaper.  By 1937, Main Street was paved, concrete sidewalks were added and water lines were installed.  By 1950 the population had increased to 1,253.

In 1963, a bond was overwhelmly approved for $60,000.  This bond would be separated into two parts: $44,000 for a new city hall and $16,000 for new fire truck and equipment.  The Council at that time were Mayor W.W. Brandes, Councilmen Dr. C.L. Bishop and J.B. Housson.  The open house for new building was on May 3, 1964. In 1988 forty-three businesses served 1,770 citizens.  In 1990 the population was 1,701, and in 2000 it was 1,915. The population as of 2011 is at 2003 and many descendants of the early pioneer families still live here today