The area was first settled by Henry Rhodes after obtaining a land grant in 1841 of about 1,000 acres (4 km2) from the Republic of Texas. The name, however, comes from a later settler, John G. (possibly Grey, but no proof for middle name exist) Jolly, who purchased 160 acres (0.65 km2) in 1866. John and his wife, Nancy Isabell (Guill) Jolly, operated a blacksmith shop and store. The Jollys donated land for a school and the cemetery in which they were eventually buried. Jollyville remained lightly settled for decades; only twenty families lived in the area in 1960. Eventually, the growth of nearby Austin led to the development of Jollyville as a suburban community.
There were 5,897 households out of which 42.2% had children under the age of 18 living with them, 57.2% were married couples living together, 9.5% had a female householder with no husband present, and 29.7% were non-families. 20.5% of all households were made up of individuals and 1.6% had someone living alone who is 65 years of age or older. The average household size was 2.68 and the average family size was 3.17.
In the CDP the population was spread out with 28.7% under the age of 18, 8.4% from 18 to 24, 41.3% from 25 to 44, 18.7% from 45 to 64, and 3.0% who were 65 years of age or older. The median age is 32 years. For every 100 females there were 99.8 males. For every 100 females age 18 and over, there were 98.7 males.
The median income for a household in the CDP was $66,999, and the median income for a family was $74,851. Males had a median income of $50,048 versus $32,004 for females. The per capita income for the CDP was $28,113. 2.7% of the population and 2.2% of families were living below the poverty line, including 1.7% of those under the age of 18 and 6.2% of those 65 and older.