Palo Pinto is located west of Fort Worth between Mineral Wells and Caddo on US 180 between Lake Palo Pinto and Possum Kingdom Lake.

The Golconda post office was established in March 1858. That same year the name of the community was changed to Palo Pinto, and it became the seat of Palo Pinto County.

Palo Pinto was the only town in the county in 1880, but that year it was bypassed by the Texas and Pacific Railway when its tracks were laid through the area. Although the town declined somewhat, its 1891 population was 400, and its businesses included a flour mill, a bank, a hotel, a gin, and a saloon. In 1940 a new courthouse replaced the 1881 structure. The population of Palo Pinto by 1947 had reportedly reached 550.

In 1990 Palo Pinto reported 350 residents and eight businesses; at that time it still was unincorporated. The community sponsors an annual old settlers' reunion.