The Fourth Ward was established as one of four wards by the City of Houston in 1839. By 1906 it included much of what is, as of 2008, Downtown and Neartown; at that point the city stopped using the ward system.
The area was the site of Freedman's Town, composed of recently freed slaves. The neighborhood became the center of Houston's African-American community in the late 19th century and early 20th century. The 1,000 freed slaves who settled the community selected the site along the southern edge of the Buffalo Bayou since the land was inexpensive and because White Americans did not want to settle on the land, which was swampy and prone to flooding. The settlers of Freedmen's Town paved the streets with bricks that they hand-made themselves. They provided their own services and utilities.
In the 1920s the Third Ward surpassed the Fourth Ward as the center of Houston's African-American community; the Fourth Ward lost prominence due to its inability to expand geographically, as other developments hemmed in the area. The Allen Parkway Village public housing complex, which had 963 units, opened in the 1940s. The opening of Interstate 45 in the 1950s separated an eastern portion of the Fourth Ward area from the community; that portion became the Allen Center business and hotel complex and is now considered to be a part of Downtown Houston.
Starting in the 1970s the City of Houston wanted to demolish Allen Parkway Village while residents fought to have the entire structure remain. In the 1980s the Fourth Ward had the poorest African-American community in the city of Houston; the sole residential area had less than 4,400 residents. 50% of the residents were below the poverty level. From the 1980 U.S. Census to the 1990 Census, the Fourth Ward was the sole community in Houston that lost Asian-Americans as many Vietnamese-Americans left Allen Parkway Village.
In 1996 Henry Cisneros, the head of the U.S. Department of Housing and Urban Development, signed an agreement to allow the City of Houston to demolish 677 of the community's 963 units as long as the site was still used for low income housing. In the late 1990s and 2000s, the area has been undergoing gentrification, with many new mid-rise apartment complexes and upscale townhomes being built. Many long-time residents, mostly renters, have moved out, unable to afford the increasing rent due to rising property values. There were 1,421 blacks living in the Fourth Ward census tract in 1990; 635 remained in 2000.
By 1999 remaining portions of Allen Parkway Village were renamed to The Historic Oaks of Allen Parkway and had around 500 residential units. Of the 500 units 280 were existing units and 220 were newly-constructed with $30 million dollar federal funding. The first new group of tenants consisted of 156 low income elderly individuals.
Garnet Coleman, a Texas state representative of the Third Ward, said in 2009 that the Fourth Ward cannot recapture the sense of community that it used to have. Coleman added "the residents got pushed to the suburbs, and the businesses got wiped away."
The population of the Fourth Ward has also been steadily decreasing with each decade. According to the 2000 Census, the Fourth Ward was the smallest neighborhood in Houston with 590 households or a total population of 1,706.
While the area around Freedman's town is traditionally black, Hispanics and non-Hispanic whites have moved to the area in recent years. There were 1,421 blacks living in the Fourth Ward census tract in 1990; 635 remained in 2000.. The Fourth Ward is no longer an enclave for the city’s African-American residents, which is displayed by the fact that 53.6% of the ward’s inhabitants are Hispanic while only 36.7% are in fact black.  Overall, Houston has a dissimilarity index of black as compared to whites of approximately 75% according to CensusScope’s segregation breakdown of the city, which is higher than the United States national dissimilarity index of 65%. 
Poverty has been a major issue for the Fourth Ward. In 1980, approximately half of the ward's residents were below the poverty line, while 95% of residents did not own their own homes. 
Houston is the largest city in the United States that does not have zoning laws. The traditional shotgun houses that were first built by freed slaves are now mixed with skyscrapers and parking lots. Sherry Thomas of the USA Today stated that the lack of regulation construction in Houston has taken away from the historical landscape of the Fourth Ward. 
Area students attend schools in the Houston Independent School District, including Gregory-Lincoln Education Center for K-8 and Reagan High School. At Gregory Lincoln for the 2006-2007 school year, the student body was 68% African-American, 31% Hispanic, and less than 1% white. Also, 94% of the school’s 211 students qualified for free or reduced-price lunch, while 78% of Gregory-Lincoln’s attendants are classified as being “at risk."
As part of the Houston Independent School District, schools like Gregory Lincoln have around the city average per pupil spending of $5,558 for the 2001-2002 school year, which is considerably lower than that of the state of Texas at $6,850 and the United States average of $7,548 for 2002.
The Freedmen's Bureau opened schools for children in the area after the establishment of Freedmen's Town. The Texas Legislature authorized the creation of public schools for Freedmen's Town by 1870. By 1872 most of the students and teachers who were at the bureau schools, which were closing, left them to attend the state-managed Gregory Institute, named after Edgar M. Gregory, an officer in the Union army in the U.S. Civil War and the assistant commissioner of the Texas area's Freedmen's Bureau. By 1876 the school became a part of the Houston public school system. The Gregory School, a 20,000 square feet (1,900 m2) elementary school, opened in 1926. It was vacant from 1980 until its re-purposing as a library. When it was vacant, it had broken windows, a leaky roof that allowed rain to pour into the facility, and pigeons living in the facility. In 2009 the facility was re-purposed as a research library.
In 2009 the HISD administration proposed relocating Carnegie Vanguard High School from a location near the Sunnyside neighborhood to the Fourth Ward. District administrators favored the move because students come from across the school district, and the central location would make transportation easier. During that year the school board approved of the plan.
The Houston Public Library operates the African American Library at the Gregory School. The library preserves historical information about the African-American community in Houston. The library features galleries, an oral history recording room, and reading rooms. $11 million dollars from federal community development block grants and construction funds from Houston Public Library and the City of Houston financed the renovation of the Gregory facility. Renovation of the Gregory School began in 2008. In February 2009 the developers of the library asked local residents for memorabilia that the library can use in its exhibits. The library was scheduled to open on November 14, 2009. Renovations took about one and one half years. As part of the renovation process, the school's windows were removed, restored, and reinstalled, and the brick on the east, south, and west sides of the building was cleaned and preserved. The north side received a set of matching bricks. The library's appearance is intended to match its original 1926 appearance. The library opened by December 2009. The library system digitized some of the materials it received so the material would be available online as well as in person.
On Wednesday March 25, 2009 the City of Houston bought the remains of the Bethel Missionary Baptist Church, which received damage in a fire in 2005. The city plans to convert the church into a park. The city purchased the church, one of the oldest in Houston, for $350,000 of special tax increment re-investment zone money. The city planned for the restoration project to take two years. Prior to the city's purchase of the church, area residents feared that the church ruins would be demolished to make room for more townhouses. Since the fire occurred, the Bethel Missionary Baptist Church congregation relocated to a new building. Pastor Robert Robertson, the leader of the church, supported the city's purchase and restoration of the church facility. The church was founded by Jack Yates.