text: As far as I could figure out, Houston was never the capital of Texas. Austin was originally settled in 1835 and used to be called Waterloo. In 1839, Mirabeu B. Lamar renamed the city to 'Austin' in honor of Stephen F. Austin, the "father of Texas", who negotiated a peace treaty with the local Indians at the site of the present day Treaty Oak after several settlers were killed in raids. At the same time, the city was also chosen to be the capital of Texas.