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In 1839, the Texas Congress formed a commission to seek a site for a new capital to be named for Stephen F. The original site was narrowed to 640 acres (260 ha) that fronted the Colorado River between two creeks, Shoal Creek and Waller Creek, which was later named in his honor.

The 14-block grid plan was bisected by a broad north-south thoroughfare, Congress Avenue, running up from the river to Capital Square, where the new Texas State Capitol was to be constructed.

Without the governmental body, Austin's population declined to a low of only a few hundred people throughout the early 1840s.

The voting by the fourth President of the Republic, Anson Jones, and Congress, who reconvened in Austin in 1845, settled the issue to keep Austin the seat of government, as well as annex the Republic of Texas into the United States.

The city's official slogan promotes Austin as "The Live Music Capital of the World", a reference to the city's many musicians and live music venues, as well as the long-running PBS TV concert series Austin City Limits.

The city also adopted "Silicon Hills" as a nickname in the 1990s due to a rapid influx of technology and development companies.

The grid plan Waller designed and surveyed now forms the basis of downtown Austin.