In 1865, John Ebert deeded eight acres for a school. Organized in 1870, the school was named Cave Creek for a nearby creek which had some natural caves. The one-room school was finished in 1881, just in time for school in September. Students cleaned the schoolhouse and carried in the wood for the stove which was located in the middle of the building. This wood stove is still in use today. The students traveled to school on foot or by donkey.

Along with the natural caves in the area, there is also a man-made cave in a creek bed not far from the school which was dug and inhabited by a hermit named Berg. The story is that he made whiskey and sold it in the area. Not knowing much about the laws, he was told his activities were illegal and not to get caught. The students at Cave Creek often toured Berg's Cave.

James A. Larson was the first teacher at Cave Creek. In the 68 years of the school's history, there were 20 teachers. A record of 82 students attended in 1917 when Miss Cora Hahn was the teacher. Sometime in the late 1920's or early 1930's, a stage and pavilion were built. The school was closed in 1950 when it was consolidated with Fredericksburg ISD. School closings in May were community affairs and always well attended. Entertainment included the children's program and graduation in the afternoon. For the evening meal, some of the men cooked BBQ which was sold by the pound. Families brought side dishes, and blankets were laid on the ground for a picnic. Adults, who previously attended Cave Creek School as children, would present a play in the evening. A dance in the pavilion followed the play.