Petersburg was founded in 1891 as a post office in southeast Hale County. It was named for Zack Peters and his wife, Margaret, who was the first postmistress. In 1902, Ed M. White established a store at the site of the present community and moved the post office southwest into Hale County. Although the townsite was platted in 1909, its population remained below 100 until the Fort Worth and Denver Railway was built through town in 1928. Wheat and milo were the main crops in the area until cotton was first planted in 1905. The town was incorporated with a population of 200 in 1927. Petersburg grew as a farming and rail shipment center, and by 1949 it had 22 businesses and 500 people. By 1980 the population had grown to 1,633; businesses included the Wylie Manufacturing Company, the Hughes Trucking Company, and a weekly newspaper, the Post. The population dropped to 1,262 according to the 2000 census.
As of the census of 2000, there were 1,262 people, 428 households, and 342 families residing in the city. The population density was 1,574.8 people per square mile. There were 498 housing units at an average density of 621.4/sq mi. The racial makeup of the city was 61.89% White, 2.14% African American, 1.66% Native American, 32.09% from other races, and 2.22% from two or more races. Hispanic or Latino of any race were 61.09% of the population. There were 428 households out of which 39.7% had children under the age of 18 living with them, 64.7% were married couplesliving together, 10.5% had a female householder with no husband present, and 19.9% were non-families. 19.4% of all households were made up of individuals and 13.8% had someone living alone who was 65 years of age or older. The average household size was 2.95 and the average family size was 3.36. In the city, the population was spread out with 31.7% under the age of 18, 8.6% from 18 to 24, 25.7% from 25 to 44, 20.0% from 45 to 64, and 14.0% who were 65 years of age or older. The median age was 33 years. For every 100 females, there were 96.6 males. For every 100 females age 18 and over, there were 87.4 males. The median income for a household in the city was $30,263, and the median income for a family was $33,047. Males had a median income of $24,511 versus $17,237 for females. The per capita income for the city was $13,531. About 14.5% of families and 19.6% of the population were below the poverty line, including 26.8% of those under age 18 and 17.3% of those age 65 or over.
