Gladewater is at the intersection of U.S. highways 80 and 271, thirteen miles west of Longview on the boundary between Gregg and Upshur counties. It was founded by the Texas and Pacific Railway Company in 1873 on land bought from Jarrett Dean and Anderson White. A community called St. Clair, two miles to the east, moved to Gladewater when the railroad announced that the only mail stop in the area would be there; residents from Point Pleasant, also bypassed by the railroad, moved to Gladewater. The first post office at Gladewater was established on August 22, 1873. The town's name probably originated from its proximity to Glade Creek, a stream that rose in a rather barren region called the Glades.

In 1874 Gladewater was incorporated with a mayor-alderman government. The incorporation lapsed, and a new charter was not obtained until 1931, when an influx of population necessitated organized city government. In 1955 Gladewater adopted a council-mayor form of government. The population grew slowly during the nineteenth century; the town had only 163 people in 1880 and 259 in 1900. In the area around Gladewater lumbering was a major activity, although farming was also important; cotton was the major crop. In 1908 the town had ten stores, one bank, two blacksmith shops, two hotels, a gin, a sawmill, and a planing mill. It continued to grow slowly until 1931.

On April 7, 1931, the first Gladewater oil well blew in. It was located one mile outside town in the Sabine River bottom. Oil production led to a population increase during the 1930s from about 500 persons to around 8,000. In 1940, after the oil boom, Gladewater had a population of 4,454. Civic improvements in the 1940s included an extensive paving project and a commercial airfield. Between 1940 and 1960 the population grew to 5,742. Lake Gladewater, constructed in 1954, provides recreation for city residents.

During the 1970s Gladewater moved from an oil-oriented to a more diversified economy, primarily because of depletion of oil resources in the area. The movement of salt water into the western edge of the large East Texas oilfield affected Gladewater first. By 1980 the town had a total of 6,548 residents, 4,311 in Gregg County and 2,237 in Upshur County. The economy in the 1980s depended on the oil industry and related activities and on the manufacture of such products as furniture, clothing, paper products, and boats. The lumber industry is also important, as is agriculture. In 1990 the community was known for its numerous antique stores. The population was 6,027. Important annual festivals include the Roundup Rodeo in June and the Arts and Crafts Festival in September. In 2000 the population was 6,078 with 402 businesses.