Matagorda Harbor is located in East Texas on the Gulf Intracoastal Waterway. Matagorda Harbor is about 15 nautical miles downriver (20 kilometers or 12 miles south-southeast) from the Port of Bay City which is located inland on the Colorado River. Matagorda Harbor is about 50 nautical miles (68 kilometers or 42 miles southwest) of Port Freeport, Texas. Matagorda Harbor is popular for its beaches and fishing.

Although now extinct as a tribe, the Karankawa people lived in the area of Matagorda Harbor before European settlers began entering the area. When the Spanish first met them in 1519, the Karankawa were a nomadic people, possibly descended from Carib Indians from the Caribbean. By 1793, some Karankawa had become Christians and lived at a mission in Refugio on the nearby Copano Bay. Traditional Karankawa lived with the Lipan Apache people.

After American settlers began to enter the area following Stephen F. Austin in the early 1820s, conflicts with the Karankawa were frequent. Fighting for Mexico during the Texas War of Independence, Chief Jose Maria and many of his warriors were killed. In 1858, Juan Nepomuceno Cortina attacked a band of Karankawa, killing them all. In 2009, a man from Brownsville, Texas, claimed to be the last Karankawa. His claims could not be verified, but the Desert Storm veteran said he had artifacts and knew some words of the language.

The Matagorda Harbor community was created in 1827 after Stephen F. Austin got permission from Mexico to build a town that would offer protection for incoming settlers. Elias R. Wightman and three other partners took a one-fourth interest each in the town.

After it was laid out, Wightman brought about 55 colonists, mostly from New York, to settle the Matagorda Harbor community. In 1829, the town owners elected officers for Matagorda Harbor. Cotton was important to the community from its beginnings. By 1825, a cotton gin was operating there. Matagorda was incorporated in 1830. By 1832, it was home to as many as 1400 people.

In the 1830s, Matagorda Harbor was the closest port to New Orleans, and it was an entry point for immigrants coming by sea and land. Still part of Mexico, a Mexican customs house began operating in 1831. One of the town's first dock and warehouse establishments was opened in 1840 to handle freight that moved along the Colorado River.

The citizens of Matagorda Harbor participated in the Texas Revolution. Men from Matagorda Harbor were among the signers of the 1835 Goliad Declaration of Independence. After Texas became a republic, Matagorda Harbor continued to grow as a shipping center, becoming a fairly typical Southern community.

By the middle 19th Century, the town had hotels, theaters, educational institutions, and many summer homes of plantation owners from the area who had summer homes in Matagorda Harbor. During the American Civil War, Matagorda Harbor was used by blockade runners who took arms and clothing to the Confederacy. When the war was over, emancipation ended the plantation-based economy. The community at Matagorda Harbor began to decline.

After the war the beef industry grew in Matagorda Harbor. Ranchers and a handful of planters who remained had homes in the community. During the latter 19th Century, several hurricanes created serious damage to the town, and the county seat was moved to Bay City. Until 1894, Matagorda Harbor was still an important port based on local factories and river transport.

Matagorda Harbor continued to be a market for cattle, cotton, and fruit after 1894. The Cane Belt Railroad came to town in 1901. In the early 1920s, two producing oil wells were operating, and the Texas Gulf Sulphur Company brought jobs and residents to the Matagorda Harbor community. In the 1930s, dredging for road-building material and fishing had grown up as important local businesses.

By the early 1940s, the population at Matagorda Harbor had reached 1,250; however, it declined to 650 by 1950. After World War II, Matagorda Harbor became popular with tourists. In 2000, Matagorda Harbor had over 700 residents and 30 businesses.

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