In the early 1880s, a group of farmers settled on the site which was on the Mobeetie-Clarendon line. In 1884, the Clarendon Land and Cattle Company began selling town lots. At various times, the town was also called Springtown, Spring Tank, Prairie Dog Town and Gouge Eye. The current name is believed to be derived from a defunct company, Alan and Reed. Alanreed was a ghost town that fell into decline in the 1930s. It is home to the remains of a 1932 Texaco Super 66 Service Station (Main St and3rd St), as well as the oldest church in Texas on Route 66. Both are abandoned.

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