The name Carancahua derives from the term that formerly referred to the Karankawa Indians, who resided on its shores.

Texas' Spanish Royal Governor, Martín de Alarcón was the first documented European to tour the bay while exploring Matagorda Bay with Tejas guides in 1718.
During the expedition, two Karankawa Indians were spotted near the bay going about their daily lives and were frightened at the sight of Alarcón and his men.
 They quickly swam across the bay despite the guides' signal to them that Alarcón meant no harm.
The next day, the Indians came ashore from a sixteen-passenger canoe (which could hold 4 men, 4 women and 8 children) and notified the Tejas guide that they wished for Alarcón and his men to leave.
As a peace offering, Alarcón presented the Indians with tobacco and clothing on behalf of the Spanish crown, which they accepted.
In exchange, the Indians offered Alarcón dried fish, and directed him toward the former French fort of St. Louis, believing Alarcón wanted to establish a colony on the bay.
Alarcón declared the bay for Spain, but did not establish a permanent settlement.

Only a handful of settlements have been established on the bay.
The town of Carancahua first formed as a small collection of cabins that were used in the 1880s as a stop for mail between Texana and Matagorda.
However, the bay's propensity for flooding and malaria prevented growth.
In fact, the bay was notorious for its swarms of mosquitos that would fly from the Colorado River delta, and documented by a late 19th-century rancher:
A fairly strong easterly wind had been blowing for three days; on the evening of the third day, the mosquitos arrived, flying high, about fifty feet, and looking like a cloud of mist over Carancahua Bay.
At the ranch, they set everything on fire that had blood in it, and all work was suspended by unanimous consent...little or nothing was done for nearly five days; by this time the main body had passed, though plenty remained to make everything uncomfortable for about two weeks.
This migration was from east to west and the line was about three miles wide.

Approximately 50 people lived at Carancahua in 1915, but the population dwindled to 25 in the next decade.
The town remains a community, but the current population is unknown.
Across the bay, a settlement of about ten permanent residents, initially known as Persimmon Point, was renamed Port Alto in 1939.
The town grew, attracting retirees and vacationers who contributed to a peak summer population of 205 in 1961.
Hurricane Carla destroyed the town in September 1961, but it was rebuilt five years later.
In 1970, a beachfront was constructed along the shoreline as the listed population reached 170 people.
The 2000 census reported that 45 people lived in the town.
  The original Schicke Point was home to a small ranching and farm operation.
 The name derives from an original resident of the point (Clarence Schicke) who came from Illinois as a game hunter and fisherman for local restaurants.
 After Hurricane Carla destroyed the ranch home and operations, C. Schicke turned to commercial fishing and building small cabins in the area.
 Schicke Point is located near the mouth of Carancahua Bay at Carancahua Pass and is a location attractive to sports fishermen.
 The village has approximately 90 residents, including legendary anglers Roy Cross (1924-2009), Otto Mendel (1913-2008), and fishing spoon expert Robert Cross.
 Cape Carancahua is a gated residential community, located on the bay's northern shore.
The name Carancahua derives from the term that formerly referred to the Karankawa Indians, who resided on its shores.
Texas' Spanish Royal Governor, Martín de Alarcón was the first documented European to tour the bay while exploring Matagorda Bay with Tejas guides in 1718. During the expedition, two Karankawa Indians were spotted near the bay going about their daily lives and were frightened at the sight of Alarcón and his men.  They quickly swam across the bay despite the guides' signal to them that Alarcón meant no harm. The next day, the Indians came ashore from a sixteen-passenger canoe (which could hold 4 men, 4 women and 8 children) and notified the Tejas guide that they wished for Alarcón and his men to leave. As a peace offering, Alarcón presented the Indians with tobacco and clothing on behalf of the Spanish crown, which they accepted. In exchange, the Indians offered Alarcón dried fish, and directed him toward the former French fort of St. Louis, believing Alarcón wanted to establish a colony on the bay. Alarcón declared the bay for Spain, but did not establish a permanent settlement.
Only a handful of settlements have been established on the bay. The town of Carancahua first formed as a small collection of cabins that were used in the 1880s as a stop for mail between Texana and Matagorda. However, the bay's propensity for flooding and malaria prevented growth. In fact, the bay was notorious for its swarms of mosquitos that would fly from the Colorado River delta, and documented by a late 19th-century rancher:
A fairly strong easterly wind had been blowing for three days; on the evening of the third day, the mosquitos arrived, flying high, about fifty feet, and looking like a cloud of mist over Carancahua Bay. At the ranch, they set everything on fire that had blood in it, and all work was suspended by unanimous consent...little or nothing was done for nearly five days; by this time the main body had passed, though plenty remained to make everything uncomfortable for about two weeks. This migration was from east to west and the line was about three miles wide.
Approximately 50 people lived at Carancahua in 1915, but the population dwindled to 25 in the next decade. The town remains a community, but the current population is unknown. Across the bay, a settlement of about ten permanent residents, initially known as Persimmon Point, was renamed Port Alto in 1939. The town grew, attracting retirees and vacationers who contributed to a peak summer population of 205 in 1961. Hurricane Carla destroyed the town in September 1961, but it was rebuilt five years later. In 1970, a beachfront was constructed along the shoreline as the listed population reached 170 people. The 2000 census reported that 45 people lived in the town.   The original Schicke Point was home to a small ranching and farm operation.  The name derives from an original resident of the point (Clarence Schicke) who came from Illinois as a game hunter and fisherman for local restaurants.  After Hurricane Carla destroyed the ranch home and operations, C. Schicke turned to commercial fishing and building small cabins in the area.  Schicke Point is located near the mouth of Carancahua Bay at Carancahua Pass and is a location attractive to sports fishermen.  The village has approximately 90 residents, including legendary anglers Roy Cross (1924-2009), Otto Mendel (1913-2008), and fishing spoon expert Robert Cross.  Cape Carancahua is a gated residential community, located on the bay's northern shore.
Carancahua Bay