Muleshoe, the county seat of Bailey County, is on U.S. Highway 84 in the Blackwater Valley. It was founded when the Pecos and Northern Texas Railway laid tracks across the county in 1913 and was named for the nearby Muleshoe Ranch. In 1917, when the county was organized, Muleshoe became the county seat; the town was incorporated in 1926.
Muleshoe remains the market and shipping center of the county.
The town grew rapidly in its early years. By 1930 it had nearly 800 residents. The population was 1,327 in 1940, 3,871 in 1960, and 5,225 in 1970, when the town had 200 businesses, two hospitals, two banks, a library, a newspaper, and a radio station.
On the main street is a highly prized statue of a mule, a memorial to the animal's contributions in World War I. A new community center was built in 1969. Annual events include a junior livestock show in February and the World Championship Muleshoe Pitching Contest on the Fourth of July.
Businesses include farm supply manufacturing and food and feed processing plants. The population in 1988 was 5,048.
The Muleshoe National Wildlife Refuge, located twenty miles to the south, was founded in 1935 and is the oldest such refuge in the state.
Muleshoe had a population of 4,571 in 1990. By 2000 the population was 4,530.