Sometime in the late 1840s, long before the town of Kyle came into existence, some cowboys from the Kyle Ranch were rounding up stray cows, when they discovered a man hanging from a limb of a live oak, about a quarter mile from Colonel Claiborne Kyle's home.

Not knowing the man's identity or why he had been hanged, they cut the body down and buried it beside this tree in an unmarked grave. In 1849, Willie Parks, an orphan boy whom the Kyles had befriended, was also buried near the tree. Later Colonel Kyle donated, as a community cemetery, the 15-acre plot of ground in which lie these graves.

This cemetery also contains the remains of some of the earliest settlers of Hays County, including Colonel John Bunton, a signer of the Texas Declaration of Independence; Major Edward Burleson, veteran of the Mexican War; and Colonel Kyle's son, Captain Ferguson Kyle, for whom the town of Kyle was named.

The Hanging Tree is located in the Kyle City Cemetery. A historical marker is at the top of the main cemetery drive and the tree is located about 200 feet to the right of the entrance. A marker "Kyle Hanging Tree" has been installed at the base of tree beside the headstone of Wm. Melton.