Jefferson is located in the Cypress Valley of Northeast Texas. Named for Francis Marion, Marion County was created in 1860. Jefferson was named for Thomas Jefferson, and was conceived as a port city by Allen Urquhart and Daniel Alley, who saw its potential as the head of navigation when they prepared a town site for Jefferson in 1841.

In 1845, when obstructions were removed from Big Cypress Bayou, steamboats could reach Jefferson from New Orleans. After the arrival of the Llama, the first steamboat to arrive, Jefferson became a boom town where many pioneers to Texas first set foot on Texas soil when they disembarked from the steamboats.  Jefferson became a port of entry into the Republic of Texas, then the State of Texas. It was also a shipping port for those who wished to sell agricultural products, especially cotton. Cotton was brought to Jefferson from as far away as Dallas by ox wagon and then sold in Jefferson through receiving, forwarding, and commission merchants to markets in New Orleans and St. Louis

During Jefferson's Golden Era as a steamboat port from 1845 until 1875, it became a cosmopolitan town like most port cities with a confluence of cultures and businesses. The architectural styles, which developed in Jefferson during this period of prosperity, resembled those of New Orleans. The homes were primarily of Greek revival design. 

When the log raft was removed by the Army Corps of Engineers in the year 1873, the water level in Big Cypress Bayou was reduced and navigation to Jefferson was threatened. Railroads were also extended during this period of time across Texas, which reduced Jefferson's commercial market area. The town ceased to be a prominent port city and commercial center. However, many of the homes and buildings remained.