Colonel Jesse Driskill, a wealthy cattle baron, established businessman and active civic leader who rose to prominence in the early 1880s, decided to build a luxurious grand hotel in his adopted hometown of Austin. In 1884 he purchased the lot at the corner of Brazos and Pecan for $7,500. When the Driskill opened two years later, the hotel was heralded in the Daily Statesman as "one of the finest hotels in the whole country."

Less than two weeks after the grand opening, the Driskill hosted its first inaugural ball for newly elected Texas Governor Sul Ross. A tradition was quickly established. In May of 1887, the Driskill General Manager, S.E. McIlheney and half the staff were hired away by Galveston's Beach Hotel, a loss of key staff that forced the hotel to close. Three months later, Colonel Driskill re-opened the hotel under new management, but a nationwide drought and an exceptionally cold winter devastated Driskill's cattle empire and forced him to sell the hotel.

Doc Day became the new owner in May of 1888, the first in a long series of owners, from Hollywood screen actors to British conglomerates, until 1895, when cattle baron, banker and president of the Texas Rangers Major George W. Littlefield acquired the hotel for $106,000 in cash, vowing that the hotel would never close again. He would later sell the hotel in 1903, but his claim would become prophetic; over the next 100 years the Driskill would add a barbershop and woman's spa, host numerous inaugural balls and add another 60 guest rooms. In 1930, the Maximilian Room was built in the former site of the Men's Parlor and Smoking Room, drawing its name from eight famous Austrian gold-leaf-framed mirrors once belonging to Emperor Maximilian of Mexico and his beautiful wife, Carlotta.

In 1934 an aspiring Texas politician named Lyndon Baines Johnson met his future wife, Lady Bird, for their first date in the Driskill dining room for breakfast, the first moment in a lifelong love affair between the Driskill and the future President and First Lady of the United States. During LBJ's presidential tenure, the Driskill served as the headquarters for the White House Press Corps and a suite, today known as the Governor's Suite, was permanently reserved for President Johnson. In June of 1969, the Driskill was closed for complete remodeling and the construction of a proposed 19-story tower. The tower plans fell through and demolition appeared imminent.

Happily, in 1970, a Save-the-Driskill community effort raises more than $700,000 and three years later, the Driskill hosted a series of grand re-opening galas. Over the next 30 years, the Driskill went through a number of different owners from around the country, each pouring millions into what is now a completely refurbished property.

The Driskill, a charter member of Historic Hotels Worldwide since 2013, dates back to 1886.