The town of Bishop was established in 1910 by F. Z. Bishop on land he had purchased from the Driscoll Ranch. The townsite was staked on both sides of the St. Louis, Brownsville and Mexico railroad line. F. Z. Bishop, who dreamed of building a model town on the prairie, managed construction of the town. Bishop planned the townsite and designed the business district to have a uniform appearance with brick facades. He began construction of an electric plant and water system, planted 600 palm trees along the streets, and laid three miles of sidewalks in town. A 40-acre city park with a lake, band pavilion and deer park were underway.
A frame schoolhouse was built, and opened in September 1910. The town grew quickly and within two years the population had grown to 1,000. The town was incorporated in April 1912; R. R. Hall, business manager for F. Z. Bishop, was elected first mayor. Churches were built. A two story brick school with a raised basement replaced the first school. Although F. Z. Bishop declared bankruptcy in 1916, the town continued to grow and prosper. Oil and gas discoveries in the 1940's caused petroleum-related industries to supplant agriculture as the chief economic base. F. Z. Bishop was buried in Bishop in 1950.