This area was historically occupied by the Osage and other Native American peoples, some of whom migrated from the east of the Ohio River Valley. Others emerged as cultures in this area, following thousands of years of settlement by indigenous peoples.
The European-American settlement of Callaway County was initiated primarily by migrants from the Upper South states of Kentucky, Tennessee and Virginia. They brought African-American slaves and slaveholding traditions with them, and quickly started cultivating hemp and tobacco, the same crops as were grown in Middle Tennessee and Kentucky. Callaway County was one of several to the north and south of the Missouri River settled mostly by Southerners in the early antebellum years. Given their culture and traditions, this area became known as Little Dixie, and Callaway was at its heart. In 1860 slaves made up 25 percent or more of the county's population, a higher percentage than in most parts of the state. Residents generally supported the Confederacy during the Civil War. The Battle of Moore's Mill was the only significant Civil War battle that occurred in Callaway County. From the Civil War era the county earned the nickname of the Kingdom of Callaway.
Other settlers in the Missouri River valley included German immigrants from the mid-19th century following the Revolutions of 1848 in the German states; they established a strong wine industry in the area and built towns with German-influenced architecture. Missouri was the second-largest wine-producing state nationally until Prohibition. Since the 1960s, numerous vineyards and wineries have been established again in the valley, including Summit Lake Winery in Holts Summit. The county is part of what is called the Missouri Rhineland, an area of vineyards along both sides of the Missouri River extending from St. Charles County west to Callaway County.
According to the U.S. Census Bureau, the county has a total area of 847 square miles (2,190 km2), of which 835 square miles (2,160 km2) is land and 13 square miles (34 km2) (1.5%) is water.
Callaway County lies on the border of transition between prairie and rugged Ozarks. The northern part of the county is relatively flat and devoid of large tracts of forests. The southern border of the county is the Missouri River, and the area is heavily forested over large hills and valleys. Cedar Creek makes up the northern part of the western border.
As of the census of 2000, there were 40,766 people, 14,416 households, and 10,336 families residing in the county. The population density was 49 people per square mile (19/km²). There were 16,167 housing units at an average density of 19 per square mile (7/km²). The racial makeup of the county was self-identified as 91.79% White, 5.66% Black or African American, 0.52% Native American, 0.52% Asian, 0.01% Pacific Islander, 0.30% from other races, and 1.21% from two or more races. Approximately 0.92% of the population identified as Hispanic or Latino of any race. 29.9% identified as of German ancestry, 22.0% s American, 9.1% as Irish (including Scots-Irish) and 9.1% as English ancestry.
There were 14,416 households out of which 35.80% had children under the age of 18 living with them, 57.10% were married couples living together, 10.40% had a female householder with no husband present, and 28.30% were non-families. 23.00% of all households were made up of individuals and 8.80% had someone living alone who was 65 years of age or older. The average household size was 2.56 and the average family size was 3.00.
In the county, the population was spread out with 25.40% under the age of 18, 11.10% from 18 to 24, 31.00% from 25 to 44, 21.50% from 45 to 64, and 11.00% who were 65 years of age or older. The median age was 35 years. For every 100 females there were 107.60 males. For every 100 females age 18 and over, there were 108.90 males.
The median income for a household in the county was $39,110, and the median income for a family was $44,474. Males had a median income of $29,574 versus $22,317 for females. The per capita income for the county was $17,005. About 6.00% of families and 8.50% of the population were below the poverty line, including 10.30% of those under age 18 and 8.30% of those age 65 or over.