On May 12, 2007, Farmers Branch became the first community in the nation to prohibit landlords from renting to most illegal immigrants. The ban was declared unconstitutional by a federal judge and upheld on appeal. Enforcement of that ban was stayed pending the outcome of its legal battle. After spending $6.1 million to defend the ordinance, it was ultimately defeated when the United States Supreme Court refused to hear the city's final appeal.

According to the United States Census Bureau, the city has a total area of 31.1 km² (12 sq mi). 31.1 km² (12 sq mi) of it is land and 0.08% is water.

The community was first settled in the early 1850s. In 1842, Thomas Keenan, Isaac B. Webb, and William Cochran received original land grants in the area. By 1843, a community called Mustang Branch had been established. Mr. Cochran later changed the name to Farmers Branch to reflect the area's rich soil and farmland. Farmers Branch was the first location of the Texan Land and Emigration Company (or Peters Colony) in 1845. This made the community one of the best-known places in Dallas County during the 1840s because of its advertising throughout Europe and the United States. Baptist minister William Bowles opened a blacksmith shop and gristmill in 1845. On May 5, 1845, Isaac B. Webb donated land for Webb's Chapel Methodist Church, the first formal place of worship in Dallas County. A school was established in the church one year later. Webb became the first postmaster at the Farmers Branch post office, which opened on January 5, 1848. It continued to function until its closure in 1866. The post office reopened in 1875. To assure that railroads would eventually pass through Farmers Branch, prominent early settler Samuel Gilbert and others sold right-of-way through their land in 1874. Around three to four years later, the Dallas and Wichita Railway completed a track from Dallas – through Farmers Branch – to Lewisville. It was absorbed by the Missouri–Kansas–Texas Railroad in 1881. The community had a population of approximately 100 by 1890 with several businesses. The population had grown to 300 during the early 1900s. A brick school building was constructed in 1916. The number of people living in the community remained stable until after World War II.

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