A visitor to Bandera can see a sign on Main Street in front of the fire department which states that Bandera was founded by Polish Roman Catholic immigrants from Upper Silesia. St. Stanislaus Catholic Church was built by those immigrants, and the church is one of the oldest in Texas. Many of the residents are descended from those original Polish immigrants.

Several stories exist regarding the origin of the name "Bandera". One says that in the 19th century, a flag was placed at the top of a path that came to be called Bandera Pass, due to bandera being the Spanish and Polish word for flag.