city, seat (1846) of Grayson county, northern Texas, U.S. It lies on a watershed split between the Red (Red River) and Trinity rivers, near Lake Texoma and Denison. Founded in the 1840s, it was named for General Sidney Sherman, a cavalry officer during the Texas Revolution and an early railroad promoter. Lying along the Butterfield Trail, it became a rendezvous for cattle drovers, buffalo hunters, and farmers. The railroads arrived in the 1870s. In 1876 Austin College (Presbyterian, founded 1849) was moved to the city from Huntsville.

Agricultural industries (cotton ginning, cottonseed-oil milling, gin-machinery manufacture, and flour milling) developed in Sherman, and local oil and gas deposits were tapped in the 1930s. Since World War II there has been considerable industrial development, including the manufacture of electronic and office equipment, truck bodies, surgical supplies, pharmaceuticals, and aluminum, steel, and wire products. Grayson County (community) College (1965) is nearby. Inc. town, 1858; city, 1895. Pop. (1990) city, 31,601; Sherman-Denison MSA, 95,021; (2000) city, 35,082; Sherman-Denison MSA, 110,595.