Founded in 1855 on the Llano River, the town became the county seat in 1856. By 1860, it was well established with stores, saloons and a hotel, but no church. The 1892 Llano courthouse has been completely restored to its original look. The entire downtown square has been designated a National Historic District.

Llano is known as the "Deer Capital of Texas" and hosts many hunters during the fall–winter season. Year-round fishing in the Llano River and Highland Lakes area makes it popular with sportsmen. Rock hounds descend on Llano to hunt for the elusive "Lanite" or pan for gold in the Llano River. Llano hosts the Texas Gold Panning Championships in September.

Llano has kept much of its frontier charm, and now brands itself as "The Way Texas Used To Be." It also is home to many world champion team ropers and rodeo participants.

Camping and picnicking are available at all city and county parks. Some include RV hookups, lake and pool swimming, fishing, boat ramps, hiking trails and scenic views. Black Rock and Shaw Island parks are on Lake Buchanan; Robinson City Park is on the Llano River; and the Llano County Community Center (park) is on the west edge of town.

The Lantex Theater, established in 1927, is one of the few historic theaters still showing first-run movies on a single screen. It also is home to the Llano Country Opry.

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