Coffee City is a small town in southeast Henderson County, Texas, United States. The population was 281 at the 2016 census, up from 193 at the 2000 census.

The town was developed after the construction of Lake Palestine in the early 1960s. As it is located on a sliver of Henderson County, a wet county (one where the sale of alcohol is permitted), which extends eastward onto Lake Palestine and Texas State Highway 155, a number of liquor stores sprung up by the 1980s to capture business from residents of Tyler and neighboring Smith County (which at the time was dry - the sale of liquor was illegal). The importance of Coffee City declined in 2012 with the passage of legislation which allowed liquor sales in Tyler.

Texas Highway 155 crosses Ledbetter Bay as it passes through Coffee City, then crosses Lake Palestine into Smith County. The highway leads northeast 19 miles (31 km) to Tyler and south 6 miles (10 km) to Frankston. Athens, the Henderson county seat, is 29 miles (47 km) west of Coffee City by highway.

People primarily travel to Coffee City to enjoy boating and fishing.

More Info: en.wikipedia.org