The area's first settlers were German families during the late 1840s. The community's name is either an alteration of a Mr. Othneil – the area's first gristmill owner, or a supposed translation of the name Habermill (Haber being a German dialect word for Hafer, "oats"). A post office was established in 1853 under the name Oatmeal. The first schoolhouse opened in 1858, only to be replaced by a second building eleven years later. A gin built in the 1870s continued to serve as a local landmark into the early 1900s. A cemetery was deeded in 1871, although burials were recorded in the area as early as 1854.
In 1936, Oatmeal had a school, two churches, and scattered dwellings. By 1990, the population was around twenty – consisting mostly of families engaged in farming and ranching. That figure remained the same in 2000.
Following the Civil War, a colony of freed slaves, "freedmen", settled in the eastern part of Oatmeal. The settlement, known as Stringtown, included homes, a building used as a church and school, and Burnet County's only all-black cemetery. The community of Stringtown remained in existence until the early 1920s.
Since 1978, the community of Oatmeal and the nearby city of Bertram have celebrated an annual Oatmeal Festival. Ken Odiorne, a local resident, started the tradition by writing to the major producers of oatmeal at the time to ask for assistance. Only one company, National Oats, responded.
The Oatmeal Festival has played a significant role in the continued notoriety and existence of Oatmeal, Burnet County's second oldest community.
- U.S. Geological Survey Geographic Names Information System: Oatmeal, Texas
- Oatmeal, Texas from the Handbook of Texas Online