Palestine (population 17,598) began as a trading post in the early 1800s and was formally surveyed to become the county seat of Anderson County in 1846. Paddle wheelers navigated the Trinity River for commerce until supplanted by the arrival of the railroad in 1872. The railroad shops, switching yard, and offices were constructed about a mile from downtown, creating two nodes of commercial activity known as Old Town and New Town.
In the 19th century, Palestine was a market and distribution point for the surrounding agricultural area and nearby salt mines. Discovery of oil east of town in 1928 diversified the economy and carried Palestine through the Great Depression. The East Texas oil fields continue to play an important role in the local economy. Palestine is also home to NASA’s Columbia Scientific Balloon Facility.
During Palestine’s heyday as a center for railroad commerce, railroad executives and merchants built elaborate homes that are now included in the Northside and Southside National Register Historic Districts. Palestine is second only to Galveston among Texas communities with large concentrations of historic architecture.
A major heritage tourism attraction in Palestine is the Texas State Railroad, a steam-powered tourist excursion train operated by the Texas Parks & Wildlife Department. After recent state budget cuts threatened the viability of the railroad, the City and a coalition of public and private partners successfully lobbied for a temporary restoration of funding. A task force is now seeking a private operator so that the railroad can continue operation in future years.
Designated a Preserve America Community in July 2006.