Cameron was established in 1846 as one of the original 23 municipalities in Texas. The city is named for Captain Ewen Cameron, an adventurer and soldier from the highlands in Scotland. Ewen Cameron was prominent in the Texas Revolution and was a member of the Mier Expedition. The city struggled through the 1840s and 1850s due to its isolated location with the nearest railroad being 50 miles away.
In 1881, the Gulf, Colorado, and Santa Fe Railways arrived in Cameron. The local economy improved and led to population growth. Agriculture, especially cotton farming, dominated the economy of Cameron during the late 19th century. In the 1920s and 1930s, several milk product companies were operating in Cameron, including the Kraft-Phenix Cheese Corporation. At the 1930 census, the population was 4,565. In the 1950s the Aluminum Company of America built a plant southwest of Rockdale. Jobs at the plant as well as the lignite industry that supplied the plant's power revitalized the economy of Milam County.