Nixon was founded in 1906 as Nixonville, when the Galveston, Harrisburg and San Antonio Railway built its lines through the John T. Nixon Ranch.
The city is the location of the Nixon Refinery belonging to Blue Dolphin Energy.
As of the census of 2000, there were 2,186 people, 686 households, and 506 families residing in the city. The population density was 1,928.1 people per square mile (746.9/km²). There were 803 housing units at an average density of 708.3 per square mile (274.4/km²). The racial makeup of the city was 69.99% White, 2.84% African American, 0.91% Native American, 0.09% Asian, 24.15% from other races, and 2.01% from two or more races. Hispanic or Latino of any race were 61.57% of the population.
There were 686 households out of which 42.1% had children under the age of 18 living with them, 48.0% were married couples living together, 17.2% had a female householder with no husband present, and 26.2% were non-families. 24.1% of all households were made up of individuals and 13.3% had someone living alone who was 65 years of age or older. The average household size was 3.02 and the average family size was 3.53.
In the city, the population was spread out with 31.5% under the age of 18, 10.8% from 18 to 24, 26.7% from 25 to 44, 16.2% from 45 to 64, and 14.7% who were 65 years of age or older. The median age was 31 years. For every 100 females, there were 94.8 males. For every 100 females age 18 and over, there were 89.5 males.
The median income for a household in the city was $22,104, and the median income for a family was $25,139. Males had a median income of $21,250 versus $15,491 for females. The per capita income for the city was $10,135. About 22.3% of families and 27.5% of the population were below the poverty line, including 37.7% of those under age 18 and 25.0% of those age 65 or over.
The city is served by the Nixon-Smiley Consolidated Independent School District.