In 1839, when Austin became the capital of the republic, Bastrop began supplying the City with lumber. Soon, ox teams were carting Bastrop lumber to San Antonio, along the western frontier, and into Mexico. Fire destroyed most of the downtown buildings in 1862, but flood posed an even greater threat. A flood of area creeks in 1869 forced evacuation of the town as waters rose as high as forty-six feet. Periodic inundations continued to plague the area until dams were built in the 1930s. Despite natural disasters, the period during and after the Civil War saw the rise of varied industry in Bastrop.
The population peaked at about 5,000 during World War II, after the establishment of nearby Camp Swift. When the camp gradually closed after the war, Bastrop shrank to 4,000, then 3,158 in 1950. Industries in 1947 included a pecan-shelling plant, a cedar-chest factory, and a cedar-oil manufacturer. From 1950 through the 1970s Bastrop’s population ranged between 2,950 and 4,050. The 1980s brought new challenges for the community as Austin grew eastward. Austin sewage polluted the Colorado, and strip-mining began pressing from the east. In the mid-1980s the town had a population of almost 4,000. In 1990 the population was 4,044.
Residents had restored many historic buildings, and commuters from Austin lived in Bastrop. As a consequence of the town’s proximity to Austin, land values soared. Bastrop remained a center for agribusiness; its industries included oil-well supply and furniture manufacturing.