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Caddo and Wichita Indian tribes occupied this area before Anglo settlement began in the 19thcentury. Among the early settlers was James G. Thompson, whose daughter, Sarah Virginia, married James A. Potts (1838-1905), a Confederate veteran, rancher, and land developer who moved to Grayson County in 1808. Recovering from a long construction delay caused by the Civil War, railroads began building lines through this area of Texas in the late 1870s. James and Sarah Potts deeded land for a right-of-way to the Denison and Pacific Railway, a subsidiary of the Missouri-Kansas-Texas Railroad, in 1878. James Potts is credited with drawing up the plat forthe new railroad town named in his honor. Within a decade Pottsboro boasted homes, churches, general stores, gristmills, a cotton gin, post office, hotel/saloon, and school. The town was incorporated on June 19, 1885. Pottsboro sustained serious damage from major fires in 1892, 1923,and 1924, but the citizens rebuilt and the town prospered. United States government construction of Perrin Army Air Field and Lake Texoma during the 1940s brought additional economic benefits to the town, which continues to play a vital role in the history of Grayson County. (1994)