Before the town of Shepherd was ever established, there were settlers living in the surrounding areas. The earliest settlements were Drew's Landing and Big Creek. They have been in existence since the 1830's. Farley Chapel served as a church and a school in the Big Creek area. According to Billie Trapp, a local historian and descendent of Dr. Henry Farley, Dr. Farley paid for the construction of Farley Chapel, having never set foot on the property himself. Dr. Farley was one of the first settlers and served as the first judge in Liberty County. He took care of all the wounded soldiers using his own money during the battle of San Jacinto. In doing so, Dr. Farley caught yellow fever and died. Although Farley Chapel has been demolished, the Farley Chapel Cemetery still remains.
Monroe Drew founded Drew's Landing in 1838 before Big Creek was settled. It was located along the Trinity River which at that time was a thriving port. A store and hotel were built on the east bank of the Trinity River which provided a shipping route for the major enterprises of the cotton and sugar plantations in the area.
At this time three bands of Coushatta Indians lived in the surrounding areas. One band, under Chief Colita, lived in the area known as Smithville. It was located ten miles north of Drew's Landing. The second band of Indians lived in the Coley Creek area. In fact, Coley Creek Road (FM 223) is an old Indian trail. The third band of Indians was Chief Mingo's. The area where the Mingo's lived (Swartwout) was in the area where the Lake Livingston Dam was erected. Mr. Swartwout, who founded this community, was an important figure in Texas history. Between the years 1836 and 1846, Mr. Swartwout served in the Texas Navy, using his own money. Sam Houston and Mr. Swartwout had intended for the San Jacinto County Courthouse to be located in Swartwout. Since Swartwout was always flooded, Coldspring was chosen as the Courthouse location. This choice was made due to the fact that Coldspring was a day's ride from each part of the county.
The establishment of Shepherd came through Benjamin Armistead Shepherd, who founded the town after moving here in 1865. Mr. Shepherd came to this area with the Houston East and West Texas Railroad. B. A. Shepherd was born on May 14, 1814 in Fluvanna County, Virginia and died in 1891. At the age of 19 he met Sam Houston who would prove to be a lifelong friend. Mr. Shepherd was involved in many businesses during his life, some of which included "Crawford & Shepherd" (1839), "Shepherd & Burke" (1842), "Houston & Galveston Navigation Company" (1865), "B. A. Shepherd & Company" (renamed "Shepherd's Bank") (1866), and "The H. E. & W. T. Railroad" (1875).
While putting a railroad through Shepherd, Mr. Shepherd, along with Frank Hardin and George W. Davis, built a house for Paul Bremond, the head of the railroad. This was the first house ever built in Shepherd. The area on which is stands was known as "the crossroads". This was because of the trails made by Indians living in the area. Sam Houston once met there with Chief Colita while recruiting for the Texas Revolution. Legend says that Mr. Houston carved his initials on a pecan tree which now overlooks the house. After Paul Bremond died, the house went into receivership and was known as the "Railroad House". When W. S. Dixon purchased the house in 1899, it became the "Old Dixon House". It is now called "The Tisinger House" for its previous owners, Roland and Bessie Tisinger. When they first moved in, Mr. Tisinger named it the "Orchard House". Under that name, the house was used as a center for teaching individuals to read and to play music. The Shepherd Public Library began on the porch of the Orchard House. Today the house remains under the historical pecan tree next to the railroad, and across from the city park, Centennial Park & Gardens, which houses the 1945 H. E. & W. T. Railroad caboose.