Mercedes is located in the Rio Grande valley just east of McAllen halfway to Harlingen along BR 83S near the United States/Mexico border.
During the 1960s Mercedes was a center for cotton, vegetable, and livestock marketing and processing. Other industries included meat packing, box and boot making, and farm-chemical manufacturing. In 1961 the town's population was 10,943. By 1970 the number of businesses there was 140. During the 1980s Mercedes was best known for its annual Rio Grande Valley Stock Show and for the large number of nationally renowned bootmakers located there.
In 1980 the city's population was 10,354, and in 1990 it was 12,694. In 2000 the town reported 377 businesses and 13,649 residents.
Mercedes is part of the McAllen-Edinburg-Mission, Texas metro area.