Midway is at the junction of the La Bahía Road (now State Highway 21) and the Old San Antonio Road in northeastern Madison County.
By 1854 a settlement existed at the site, but it was not until Joseph Addison Clark moved there in 1855 that the town was named after his hometown of Midway, Kentucky. A post office was opened in 1856, and that year Clark helped found and taught at the first school in Midway. Clark was also the first pastor at the Midway Church of Christ, a strong church for many years. The church had been established in 1854, and in the 1980s its congregation still worshipped in the original building at the same location. Other churches in Midway in the 1980s were the Midway Methodist Church, the South Side Church of Christ, and the Midway Assembly of God Church. The Methodist church was started in 1870, and it initially shared a minister with the Elwood Methodist Church. The Assembly of God Church (originally called the Apostolic Church) did not have its own building in Midway until 1948; its early members first met in the nearby Hideout School. In the 1980s it had about forty members.
The school at Midway was closed during the Civil War but was subsequently reopened and soon had enough students to fill two rooms. In 1896 there were 107 pupils and three teachers in this school; at this time there was also a school for black students, with eighty pupils and one teacher. In 1912 a new wood-frame school building, with two stories, three classrooms, and an assembly room, was constructed. A brick school was built in 1934. The Midway school was consolidated with the Madisonville Independent School District in 1960 because it no longer had enough students. Growth in the community has been tied to the economic fortunes of the local cattle industry. In 1884 Midway had seventy-five residents, in 1892 about 100, and in 1904, some 217. By 1936 the town had a population of 530 and a bank, some fifteen other businesses, a church, and a cemetery. However, in 1959 it reported only eight businesses and 400 residents. In 1990 Midway had three businesses and a population of 274. By 2000 the population was 288. Source: Handbook of Texas Online