The San Marcos Baptist Academy story began December 20, 1905, when the Rev. M. E. Hudson, a pastor in San Marcos, and the Rev. J. B. Holt spoke at a meeting in Lockhart on the need for a Baptist school in the southwestern area of the state. After their speeches, the Rev. T. J. Dodson, a pastor from Seguin, moved that the Baptists of Southwest Texas establish a school and that an educational rally be held in San Marcos on January 18, 1906.

At the rally, a committee was appointed to visit towns to secure bids for the contemplated school. The committee visited San Marcos, Lockhart, Seguin, Gonzales, Corpus Christi, and San Antonio.

Bids were opened at a meeting held in San Antonio, March 15-18, 1906. On the recommendation of Dr. J. B. Gambrell and Dr. J. M. Carroll, the committee agreed to establish an Academy in San Marcos.

The placement committee promised the City of San Marcos that if the citizens raised $13,000, the Baptists of Southwest Texas would raise a similar amount, giving a total of $26,000 for the school. On July 16, 1906, this proposition was accepted by the San Marcos citizens, and fifty-seven acres of land in the most scenic section of San Marcos were given for the campus.