An early settler in the region was Martin Lacy, who built Lacy's Fort just to the west to the current site of Alto in around 1838. In 1838 and 1839, during the campaign to suppress the Córdova Rebellion, the fort served as an operations and supply base for the Third Militia brigade commanded by Maj. Gen. Thomas J. Rusk. The town of Alto was laid out in 1849 and named for the Spanish word meaning "high," on account of the site's elevation on a drainage divide between the Neches and Angelina Rivers.
As of the census of 2000, there were 1,190 people, 452 households, and 282 families residing in the town. The population density was 707.1 people per square mile. There were 534 housing units at an average density of 317.3 per square mile. The racial makeup of the town was 65.55% White, 24.79% African American, 0.50% Native American, 0.17% Asian, 6.81% from other races, and 2.18% from two or more races. Hispanic or Latino of any race were 10.25% of the population. There were 452 households, out of which 29.4% had children under the age of 18 living with them, 42.0% were married couplesliving together, 16.4% had a female householder with no husband present, and 37.6% were non-families. 34.5% of all households were made up of individuals, and 19.7% had someone living alone who was 65 years of age or older. The average household size was 2.44 and the average family size was 3.16. In the town, the population was spread out, with 27.6% under the age of 18, 7.3% from 18 to 24, 22.5% from 25 to 44, 20.1% from 45 to 64, and 22.4% who were 65 years of age or older. The median age was 38 years. For every 100 females, there were 80.6 males. For every 100 females age 18 and over, there were 76.8 males. The median income for a household in the town was $19,438, and the median income for a family was $24,167. Males had a median income of $22,955 versus $16,875 for females. The per capita income for the town was $11,648. About 28.3% of families and 33.8% of the population were below the poverty line, including 40.3% of those under age 18 and 29.1% of those age 65 or over.
In 2011, the city eliminated its entire police force after the city council cut the police budget to zero, causing residents to brace for increased crime. A councilman is quoted as saying "The police department, being a non-money-making entity, was the easiest to get rid of." Meanwhile, police services are provided by the county sheriff and, assuming the town's finances improve, it will be opened up again in December.
