Granger is located on State Highway 95 twelve miles north of Taylor in northeastern Williamson County. It originated in 1882 when the Houston and San Antonio branches of the Missouri, Kansas and Texas Railroad intersected at the site. The log Grange hall, lodge, and store were moved to the intersection from nearby Macedonia. The new community, first named Pollack, was later named for the Grange association or for John R. Granger, a Civil War veteran.

Because Granger was in the middle of the fertile blackland area, the railroad network made it an important cotton marketing and shipping point. The town's first newspaper, the Granger Banner, appeared ometime before November 1887. A post office was established in April 1884, and banks, churches, and schools were immediately begun. The Georgetown and Granger Railroad Company chartered a link line on December 13, 1890, and constructed more than fifteen miles of track between the two towns in 1892 and 1893. In 1890 Granger had three churches, a college, a hotel, and five gins. The town was incorporated in 1891. By 1900 the population had risen to 841, and it doubled in the next ten years. By 1910 a combined cotton compress and cottonseed oil mill, an electric light plant, an ice factory, and a waterworks were all built. The Granger gin was among the largest of its day in the United States. Mark Jones opened the town's first bank in 1894. In 1912 Granger became the only town in Texas with a population of less than 5,000 that had paved streets. The Storrs Opera House, built by A. W. Storrs in 1905, hosted traveling shows and even featured the Chicago Opera Company.

Czechs were attracted to the cheap, fertile land, and by the early twentieth century Czech culture, both Catholic and Protestant, had become strong and influential in the community. A Czech Protestant church was first organized in Granger in 1880. A Brethren congregation, the most important Czech Protestant church in Texas, was established in 1892. In 1903 a convention of Brethren congregations in Texas was held in Granger and successfully unified all the congregations into the Evangelical Unity of Bohemian and Moravian Brethren. A Brethren teacher-training summer school, called Hus Memorial School, was established in Granger in 1914. It was later moved to Temple. The Granger National Bank, opened in 1937, advertised in Czech newspapers as "your Czech bank." Našinec, a Czech-language Catholic weekly newspaper for Texas, began in 1914 and was still being published in 1989.

The Granger population peaked in the mid-1920s at over 2,000 and subsequently declined during the general exodus from rural communities to cities. In 1938 the first corn carnival south of the Mason-Dixon Line attracted 20,000 attendants to Granger. In 1981 Granger Lake, formed by a dam the San Gabriel River, was opened to the public. The population of Granger in 1987 was 1,236. In 1990 it was 1,190.