In 1832 while in Bastrop, Tannehill received a headright league on the north bank of the Colorado River, east of and adjacent to what would become Austin, and that became the location of the Montopolis townsite. Planning and surveying of the 800-acre townsite started in 1838, and Jesse Tannehill moved his family to the Montopolis tract in early 1839. George W. Bonnell, who recorded his “Observations” while traveling through the Texas frontier in 1838, provided this description while traveling up the Colorado: “[July 24th we then reached] the intended scite [sic] of the new town to be called Montropolis [sic]. It is on the east bank of the river, and tolerably pleasantly situated. Some 15 or 20 men are now at work at this place, who expect to have each a cabin erected in a few weeks.” Three miles farther Bonnell reported arriving at another “new town”: Waterloo.

On July 2, 1839, Jesse Tannehill and five other men entered an agreement defining their Montopolis partnership that was recorded by the Bastrop County clerk. This document contains the earliest known plat of the original town tract. The original Montopolis town tract was designed with lots for homes, farming, out-lots, and churches, “Seminaries of learning and other Public buildings…to promote the general prosperity of the place.” Streets were laid out on a grid much like Edwin Waller’s design of Austin. Indeed, evidence suggests Montopolis aspired to become the capital of the new Republic of Texas, but Waterloo was selected instead. Montopolis did not develop as expected, probably because of its proximity to Austin, and by 1841 the Montopolis partnership was dissolved, and land sold. Although the Montopolis partnership ended, Montopolis as a community persisted; businesses such as Howard’s Montopolis Nursery at the heart of the original town tract preserved the memory of the original Montopolis into the twentieth century. Legal documents continued to reference the “Montopolis town tract” into the twentieth century.

The second Montopolis is a community south of the Colorado River on the Santiago Del Valle grant that began taking shape in Texas’s Reconstruction era and into the early twentieth century, evolving to become the neighborhood most Austinites recognize today as Montopolis. In 1838 when Tannehill laid out the original town tract north of the river, the area south of the river where the current community exists comprised nine leagues of the Santiago Del Valle grant. It was still virtually vacant land entirely owned by Galveston founder Michael B. Menard who sold it to Thomas F. McKinney in February 1839. McKinney did not begin selling portions of it until after Waterloo had been selected as the capital. Tannehill never owned any part of the Santiago Del Valle grant, nor was he in any way involved in development or settlement south of the Colorado River, where the current community of Montopolis is located. In the nineteenth century the earliest post office that opened south of the river on the Del Valle grant was Bluff Springs in 1853, followed by Del Valle in 1878, Carl in 1887, and the last was the Montopolis post office opening in January 1897 on the south bank of the river near the ferry crossing; it was discontinued in 1902. While short-lived, the post office, along with its location on the Montopolis ford, was the catalyst for the adoption of the name Montopolis for the community that was developing south of the river.

One of the most significant landmarks that identifies the neighborhood was established in 1950 when seventy local residents petitioned the Travis County Commissioners Court to rename two existing nineteenth century roads from Miller Lane and Boothe Lane to Montopolis Drive. Most of Montopolis proper was annexed by the city of Austin in 1951. Additional portions of the area were annexed during the 1960s and 1970s.

Rural and sparsely populated, the remainder of the 19th century saw the Montopolis area used primarily for plantation agriculture. In the 1920s, s\ucceeding waves of Mexican migrants helped establish the modern neighborhood that exists today. Between the 1950s and 1970s, the City of Austin annexed Montopolis, although the area retains much of its rural character.