Chosen county seat of Shackelford in 1874, Albany had a 43-acre townsite donated by Sheriff Henry C. Jacobs. County Clerk W.R. Cruger named city for his old home, Albany, Ga. A wooden picket courthouse was erected. The post office opened Aug. 1, 1876. By late 1877 there were 16 buildings—homes, hotels, saloons, a blacksmith shop. Merchants were T.E. Jackson and firm of Woody & Hatcher. Physicians W.T. Baird and W.M. Powell and Lawyer A.A. Clarke located here. D.H. Meyer and Edgar Rye began (1879) publishing "The Albany Tomahawk". Already on the Western Cattle Trail, city expanded as a frontier shipping point when Houston & Texas Central Railroad built a terminus here in 1881.
By 1882 a church building had been erected. Music lovers organized a cornet band. In 1883 an opera hall opened, and a permanent courthouse of native stone was built. Succeeding D.R. Britt as the school principal, W.S. Dalrymple founded an adult study club, "The Chautauqua Literary and Scientific Circle".
Albany had an academy, and then a college in 1898-1915. Local activities include ranching, petroleum production, small farming, and annual staging of the historical drama, "The Fort Griffin Fandangle".