The City of Burnet was founded in 1849 as Hamilton, and grew up around Fort Croghan. When Burnet County was created in 1852, Hamilton (also known as Hamilton Valley) was chosen as the county seat. The naming of the village as the county seat and the early protective presence of Fort Croghan were attractions which drew settlers to the area. In 1858, Hamilton received its current name, Burnet, honoring David G. Burnet, the provisional president of the Republic ofTexas.

When a railroad was completed from Austin to Burnet in 1882, Burnet became the trade center for a large area to the west and north. A spur was extended 16 miles from Burnet to Granite Mountain in 1885.

Granite was quarried and shipped to Austin for construction of the State Capitol building. Small marble quarries have also been worked through the years in various parts of the county. A block of marble from the Samuel E. Holland holdings (about 3 miles south of Burnet) was hauled to Austin by ox–cart. It was then shipped by rail to Washington, D. C. as Texas’ contribution to the Washington Monument.