A small villa grew up around the walls of the presidio and was call La Bahia. This area was occupied by the Spanish until 1821 when Mexico won its independence from Spain. The name of the town was officially changed to Goliad in 1829. Goliad is a phonetic anagram of Hidalgo, the name of the priest who became a hero during the Mexican Revolution. Mexican soldiers occupied Presidio La Bahia from 1821 to 1825.

The first cattle ranch in Texas is said to have its beginnings at Mission Espiritu Santo. Along with its sister, Mission Nuestra Senora del Rosario, Mission Espiritu Santo possessed the largest longhorn herds in the state, at times owning more than 40,000 head.

The first offensive action of the Texas Revolution occurred here on October 9, 1835 when local colonists captured the fort and the town. The first Declaration of Texas Independence was signed on the altar of the presidio chapel on December 20, 1835. As 92 citizens signed the document pledging their support to the cause of freedom, the "Bloody Arm" flag, first flag of Texas Independence, was hoisted above the town.

The flag, described as a white ground, in the center of which "...was a sinewy arm and hand painted red, grasping a drawn sword of crimson," symbolized the Texians' willingness to make any sacrifice, no matter how great, to win their freedom from the tyranny of General Antonio Lopez de Santa Anna.

During the 1836 Texas campaign, Colonel James Walker Fannin's force surrendered in defeat at the Battle of Coleto Creek. The Texian soldiers were imprisoned in the presidio for a week. On Palm Sunday, March 27, Colonel Fannin and his 341 men were marched outside the walls and shot, making Goliad the site of the largest single loss of life in the cause of Texas Independence. The Goliad Massacre, which accounted for twice the loss of life as that at the Alamo, was, in part, the inspiration of Gail Borden's headline, "Remeber Goliad! Remember the Alamo!", which becomes the rousing battle cry of the victorious Texians at the Battle of San Jacinto.

One of Goliad's most endearing legends was also born of the heroism associated with the massacre here - that of the Angel of Goliad. Panchita Alvarez, wife of a high-ranking officer in the Mexican army is credited with saving at least 28 lives by begging the commander there to spare them. One of the survivors, Dr. Bernard, wrote "Her name deserves to be recorded in letters of gold among those angels who have from time to time been commissioned by an overruling and beneficent power to relieve the sorrows and cheer the hearts of man.".

 

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