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The opening of Camp Hood radically altered the nature of the local economy, since the sprawling new military post covered almost half of Killeen's farming trade area.The loss of more than 300 farms and ranches led to the demise of Killeen's cotton gins and other farm-related businesses.By 1990, its population had increased to 63,535, and 265,301 people lived in the Killeen/Temple metropolitan area.In addition to shaping local economic development after 1950, the military presence at Fort Hood also changed the city's racial, religious, and ethnic composition. By the early 1950s, Marlboro Heights, an all-black subdivision, had been developed.) a few miles southwest of a small farming community known as Palo Alto, which had existed since about 1872.The railroad platted a 70-block town on its land and named it after Frank P.

By 1955, Killeen had an estimated 21,076 residents and 224 businesses.Killeen expanded as it became an important shipping point for cotton, wool, and grain in western Bell and eastern Coryell Counties. Around 1905, local politicians and businessmen convinced the Texas legislature to build bridges over Cowhouse Creek and other streams, doubling Killeen's trade area.A public water system began operation in 1914 and its population had increased to 1,300 residents.Many of the residents of the surrounding smaller communities in the area moved to Killeen.By 1884, the town had grown to include about 350 people, served by five general stores, two gristmills, two cotton gins, two saloons, a lumberyard, a blacksmith shop, and a hotel.

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In 1956, the city school board voted to integrate the local high school.