When the area was settled in the 1870s, the community was named Brady City after Brady Creek, which runs through town. The name was shortened to Brady when the town was incorporated in 1906. In 1787–88, Spanish explorer José Mares crossed the creek near the site of present Brady. Henry and Nancy Fulcher, the first settlers on Brady Creek, donated land for the townsite in the mid-1870s. Allison Ogden and his father-in-law, Ben Henton, built a store in 1875. A post office opened in 1876. After residents of McCulloch County chose Brady as county seat on May 15, 1876, the town grew fairly quickly. Brady had about 50 residents in 1877, and a stone courthouse was completed in 1878.