Long before the arrival of Stephen F. Austin's colonists, the Coushatta Indians traveled through the lands that would become the Lake Creek Settlement upon the Coushatta Trace, a trade road from Louisiana into Texas. Located in Austin's second colony in the Mexican state of Coahuila and Texas during the Texas colonial period, Lake Creek Settlement traces its origins to 1825.
On June 4, 1825, Stephen F. Austin signed a contract with the Mexican government to begin the introduction of five hundred families from the United States. In 1831, some of the families settled between the West Fork of the San Jacinto River and a stream called Lake Creek in today's Montgomery County. The Lake Creek Settlement is the earliest known Anglo American settlement in the county.
In 1835, William W. "W.W." Shepperd, a colonist from North Carolina, purchased a tract in the northwesternmost corner of the John Corner League. Shepperd opened a store on the property, the first business in the area. He also operated a gin and stockyard and was the postmaster. In July 1837, Shepperd founded the town of Montgomery at the site of his store.
The area's proximity to Town Creek and available fresh water attracted settlers and provided for their crops and livestock. In addition, nearby popular trade routes aided in the community's
growth, serving as a trade stop or meeting place. A number of Lake Creek settlers fought in the Texas Revolution, including John Marshall Wade, who manned one of the famous "Twin Sisters" cannons during the Battle of San Jacinto.