Grassyville, Texas was settled as an agricultural community in Bastrop County near the border between Bastrop and Lee counties by German Methodist immigrants from various German states (Prussia, Hanover, and Saxony) beginning in the mid-1850’s. A parsonage was built in 1858, but a church was not erected until 1868. A post office for the community was founded in 1877 just over the county line in Lee County only to move between Lee and Bastrop counties a number of time before finally settling in Bastrop County in 1883. By 1884, a gristmill, cotton gin, general store, two churches, and school also served a community of seventy-five people. The post office closed in 1906 and the school held its final classes in 1933, by which time the total reported population was ten people.

The last remaining vestige of the town is the Grassyville cemetery, which the Grassyville Cemetery Association maintains. Within the cemetery are the graves of seven soldiers from the community who served in Company A of the Fifth Texas Field Artillery, a unit which was formed in Bastrop County.