Established in 1881 by the Galveston, Harrisburg and San Antonio Railway as Hondo City, the town was named after local Hondo Creek (literally translated as "Deep Creek"). The town prospered after becoming the Medina County seat in 1891. Its name was shortened to Hondo in 1895, and in 1942, it was incorporated.
Hondo was home to the largest navigation school in the world during WWII at Hondo Army Air Field. Deeded to the city, the 3,300-acre airfield is now the South Texas Regional Airport at Hondo.
The city remains the trade center for the southern Hill Country and South Texas. Hondo also is best known for its "Welcome" signs, on either end of town, proclaiming "This is God's Country, please don't drive through it like hell!" The signs date back to the 1940s.
Events include the Cowboy Country Roundup in February, Hondo Army Air Field Fly-In in May, Medina County Fair in September, Wild Game Festival in October, and Christmas in God's Country Market Days and Night Parade in November.