Bay City replaced an older town as the county seat in 1894

Before Bay City, the town of Matagorda served as the county seat. In 1894, investors formed the Bay City Town Company and persuaded county voters to move the seat to the new townsite on Bay Prairie. The name comes from this prairie, not from a bay.

Three railroads reached Bay City by 1914, and by that same year it was called the center of a major rice-producing area. The early economy ran on cotton, then cattle, then rice, then oil — discovered in the county in 1904. The chemical industry arrived in the 1960s. Today Bay City remains the county seat and home to the county courthouse.