Merkel, off I-20 / US 84 seventeen miles west of Abilene in northwestern Taylor County, was founded in the early 1880s when the Texas and Pacific Railway arrived; it was first known as the "Windmill Town." It is now part of the Abilene, Texas metropolitan area.
Farming and ranching were the primary economic factors in Merkel's early development. Though agriculture continues to play a significant role in the town's economic health, residents also rely on oil-production jobs and military-support jobs at Dyess Air Force Base.
The population was 1,848 in 1933, 2,005 in 1940, and 2,314 in 1950. In 1992 Merkel had 2,469 residents.