Before the Civil War the population of Texas was concentrated in the eastern area, where there were rivers and wooded areas and sufficient rainfall for crops, especially cotton. Settlements in the western plains consisted largely of military posts forming a line of defense against the Comanches. The posts were reactivated after the war, and in 1874–75 the majority of the Indians were subdued and confined to reservations. Then the buffalo herds were slaughtered for the animals' hides.

Meanwhile, cattle raising had become an important industry in East Texas, and great herds were being driven up the trails annually to the railheads in Kansas. With the Indians and buffalo gone, the herds were moved onto the plains. There was a constantly growing demand for beef in the North and in Europe, and great cattle ranches developed in West Texas. The cattlemen were followed by sheepmen, the sheepmen by farmers. By the end of the century the plains were largely occupied.

Although oil had been discovered in Texas as early as 1866, it was not until the rich Spindletop field near Beaumont was opened in 1901 that an oil boom began. One discovery followed another; the greatest was the East Texas field, in 1930–31. Agricultural developments of the 20th century included introduction of citrus groves in the lower Rio Grande valley and of cotton in the western plains.