The area was first settled around 1840. Originally called "McCownville," its name was changed to "Ladonia" in 1857, supposedly in honor of A. T. Donitz. Its population grew late in the 19th century when the Gulf Colorado Santa Fe Railroad went through Ladonia, making it a shipping point for corn, cotton, and grain crops. Because of this, the population increased rapidly to 1,500 in the 1890s and peaked at over 2,000 by the turn of the 20th century. However, Ladonia suffered during the Great Depression. At a population of 1,199 thereafter, it never recovered but continued to decrease in population, falling to 658 in 1990 and 612 in 2010.
As of the census of 2000, there were 667 people, 266 households, and 188 families residing in the town. The population density was 363.5 people per square mile. There were 316 housing units at an average density of 172.2 per square mile. The racial makeup of the town was 70.61% White, 25.34% African American, 0.75% Asian, 1.65% from other races, and 1.65% from two or more races. Hispanic or Latino of any race were 2.55% of the population. There were 266 households, out of which 28.9% had children under the age of 18 living with them, 44.7% were married couplesliving together, 20.7% had a female householder with no husband present, and 29.3% were non-families. 25.9% of all households were made up of individuals, and 14.3% had someone living alone who was 65 years of age or older. The average household size was 2.51 and the average family size was 2.97. In the town, the population was spread out, with 26.4% under the age of 18, 8.2% from 18 to 24, 24.4% from 25 to 44, 24.3% from 45 to 64, and 16.6% who were 65 years of age or older. The median age was 38 years. For every 100 females, there were 89.0 males. For every 100 females age 18 and over, there were 86.7 males. The median income for a household in the town was $26,389, and the median income for a family was $31,591. Males had a median income of $26,806 versus $19,615 for females. The per capita income for the town was $13,851. About 18.9% of families and 24.6% of the population were below the poverty line, including 34.3% of those under age 18 and 30.2% of those age 65 or over.
