Various Caddo groups, including the Kichai, Ionis, and Tonkawa Indians, were the earliest known inhabitants of the area that became Grayson County. These Indians, agriculturalists who found the soils of the area suitable to their way of life, traded and negotiated with the Spanish and French. Initial settlements where established by the French and Spanish expeditions in 1836-37 at Preston Bend on the Red River, at Pilot Grove in the southeastern part of the county, and at Warren. The colony progressed rapidly after the establishment and surveying of the Peters colonyqv in the early 1840s. On March 17, 1846 Grayson County was marked off from Fannin County.

By 1850 Grayson County had a population of 2,008, most of whom had come from Southern states. The census enumerated 186 slaves, used mainly by farmers and stockmen along the Red River and its tributaries to raise grains and livestock, cotton being a minor crop in the area until much later. Throughout the 1850s Preston Bend grew in importance, and the character of the county as a trading and market center gradually emerged. Further growth increased in 1858 when Sherman became the designation as a station on the Butterfield Overland Mailqv route. The political instability and economic depression that characterized much of Texas in the Reconstruction era plagued Grayson County as well.’

From 1870 to 1880 settlement in North Texas flourished. The arrival of the Houston and Texas Central Railroad in Sherman and the Missouri, Kansas and Texas in Denison in late 1872 initiated a period of phenomenal growth and development for Grayson County. The population expanded from 14,387 in 1870 to 38,108 in 1880, an increase unparalleled in the entire history of the county. Numerous towns—including Denison, Van Alstyne, Howe, Whitewright, Pottsboro, and Tom Bean—sprang up as a result of the coming of the railroad to Grayson County.

The number of farms in the county regularly increased, reaching a zenith of 5,762 in 1900. The same year marked the highest production of corn in the history of the county—3,681,640 bushels. Bumper crops of wheat and cotton were also noted, and commercial orchards flourished. Throughout the early years of the twentieth century Grayson County remained agricultural, its farms in 1910 comprising 553,527 of the county's 602,880 total acres.The advent of the automobile effected significant changes in Grayson County. The first countywide road system, all gravel, was established in 1915, and by 1920 Grayson County had hard-surfaced roads.

On May 15, 1896, a tornado measuring F5 on the Fujita scale struck Sherman. The tornado had a damage path 400 yards wide and 28 miles long, killing 73 people and injuring 200. About 50 homes were destroyed, with 20 of them being completely obliterated.

Today, the county contains approximately 940 square miles, including Lake Texoma, one of the largest manmade lakes in the United States. The population currently over 113,000 will swell by about 150,000 on three major long weekend holidays in May, July and September. As the Dallas-Fort Worth Metroplex moves Northward, Grayson County grows rapidly. Industrial plants play an increasing role in the economy but farming and ranching hold the largest part. Commutes to the Metroplex are daily a routing to workers who reside in the Southern part of the County.