Bald Cypress trees growing along the small stream draining Hamilton Pool

Prior to the 19th century, the Tonkawa and Lipan Apaches lived in the area. In the mid-1860s, Morgan C. Hamilton owned the property now known as Hamilton Pool Preserve. His brother, Andrew Jackson Hamilton, evidently visited the grotto while serving as Texas governor (1865–66). In the 1880s, the Reimers' family, immigrants from Germany, bought the property to raise sheep and cattle. Legend says that their eight-year-old son discovered the collapsed grotto.

Although ranchers might have considered the grotto a safety hazard for their livestock, the Reimers soon realized its value as a recreational area and opened the property for public use. Around the turn of the 20th century, the site did not attract many visitors, but by the 1960s, and on into the 1980s, Hamilton Pool's popularity had increased. The land suffered from sheer numbers and few restrictions.

In addition to impact from the visiting public, cattle, sheep and goats grazed the delicate ecosystem for several decades, resulting in changes to the native vegetation. In 1980, the Texas Parks and Wildlife Department cited Hamilton Pool as the most significant natural area in rural Travis County. In 1985, Travis County purchased 232 acres (0.94 km2) from the Reimers family and implemented an aggressive land management plan to restore Hamilton Pool. Now, as a result of the restoration plan, the ecosystems of Hamilton Pool are recovering.

Ongoing land management practices at Hamilton Pool Preserve include prescribed burns, prairie restoration, endangered species surveys, biological inventories and water quality monitoring.[1]

In February 2021, a series of five winter storms,[2] including Winter Storm Uri and Winter Storm Viola, swept through Texas in rapid succession. Ice wedges formed in the overhanging cliff and the frequency of rockfalls greatly increased, resulting in the closure of the pool itself.[3] A portion of pool re-opened for swimming in May 2022 but has intermittently closed since then due to high bacteria levels.[4] The trail underneath the overhang remains closed.