When the Gulf, Colorado, and Santa Fe Railroad initially built a station at Hall’s Bayou near the Brazoria-Galveston County line, it was named Hall’s Station. However, in 1890, Galveston businessman Henry J. Runge, who specialized in importing, cotton exporting, and banking, established a town site near the station. He chose the name Arcadia after the Louisiana town; the name also comes from a peaceful, rural region in Greece known for having contented residents. The town included a school which Runge personally helped to construct, as well as a ten acre public park (still used today). Runge advertised his town nationwide, and organized trains to take people out to see the land, where several Galveston businessmen maintained country homes.

The economy consisted of diversified farming of vegetables, fruits, dairy, poultry, and cattle raising. As all of the area farming communities, several agricultural booms occurred over about four decades with cash crops of pears, citrus, figs, and strawberries.

After World War I, dairy farming became the most profitable and lead to the opening of a creamery and processing and marketing plant.