Houston was once called Kilpeter, meaning "the chapel of Peter". The Kilpeter lands were granted to Hugo (or Hugh) de Padvinan in the 12th century, and the village which grew up around his castle were called "Hugh's toun", which became "Houston". In the 18th century a new owner demolished part of the castle and used the stones to build a new village further away. The Houston Inn is one of the few buildings still in existence from this time.
Weaving was the main industry of Houston from the late 17th century into the 19th century. In 1793 the Crosslee cotton mill opened on the River Gryffe, and in the 19th century Houston became well-known for the production of high quality embroidery.