The King William Historic District occupies land that was once irrigated farm land belonging to the Mission San Antonio de Valero, commonly known as the Alamo. When the mission was secularized in 1793, the lands were divided among the resident Indian families from the mission or sold at public auction.

The area known today as the King William Historic District was subdivided into lots in the 1860s and laid out with the present streets. It was about this time that a great many Germans, who had immigrated to Texas in the 1840s, began to settle in this area and it became known as "Sauerkraut Bend" to the rest of San Antonio. It developed into an idyllic neighborhood of large, impressive houses in the Greek Revival, Victorian, and Italianate architectural styles. The main entry street into the area was given the name King Wilhelm in honor of King Wilhelm I, King of Prussia in the 1870s. During World War I, when America was at war with Germany, the name was changed to Pershing Avenue. A few years after the war was over the original name was restored, but this time it was given the English version of the name, King William, and it has remained so since.

In the early 1900s the King William District began to wane as a fashionable neighborhood and by 1920 many of the original homebuilders had died and their children moved to other parts of San Antonio. During the 1930s and 1940s the neighborhood declined and many of the fine old homes were converted into apartments and only a few of the earlier settlers remained.

Around 1950, however, the area began to attract a group of people who found its proximity to the downtown business district attractive and who, moreover, recognized the potential of restoration of the fine old houses and smaller cottages. The interest in preservation of the area began to be aroused and once again it became a "fashionable" and desirable place to live. In 1967 the King William District was the first neighborhood designated as a Historic District in Texas, designed to protect it for the benefit and enjoyment of the public. The district was expanded in 1984 to include a more eclectic neighborhood of cottages south of Alamo Street – affectionately known as “Baja King William.” The King William Historic District is located south of downtown and bounded by Durango, South St. Mary’s, Eagleland and the San Antonio River.