Lebanon is west of State Highway 289 three miles southeast of Frisco and fifteen miles north of Dallas in southwestern Collin County. The area was originally called Shahan's Prairie, after a rancher who settled there in the 1840s. Although the exact date of the change is not known, the name became Lebanon in honor of the native city of Danson Clark and other settlers who moved from Lebanon, Tennessee, around 1845. For the first fifty years of its history Lebanon was a promising farming community.
A post office opened in 1860. By the 1890s the village had an estimated population of 450, three churches, and twenty businesses. In 1902, however, the St. Louis, San Francisco and Texas Railway bypassed Lebanon. Within three years most of the residents had moved to Frisco in order to be near the railroad. In 1905 the post office was closed, and by the 1940s the population had decreased to fifty. The number of residents has not increased since that time.