Before Fiesta Texas opened in 1992, the site was part of the Redland Quarry which began operation in 1934. By 1988, the limestone in the portion where Six Flags Fiesta Texas is located was depleted and the land was available for development.

The development team consisted of property owner USAA Real Estate Company, a subsidiary of the USAA insurance company and Gaylord Entertainment Company, a company that owned Opryland USA, a theme park in Nashville, Tennessee. When the initial ownership group began investigating a possible major theme park development in San Antonio, Texas, they faced significant competition in the Texas market. There were similarly established Six Flags parks in Arlington and Houston. Based on the competition, the development team believed the opportunity in San Antonio (an established regional leisure destination) was there and that the stable, slow growth direction of the theme park industry in the U.S. was in their favor.

The concept plan and master plan were developed by FORREC International based in Toronto. FORREC handed over a detailed design of the project to San Antonio-based architecture and engineering groups: Benham/Jones Kell and Pape Dawson. Actual construction of the theme park took approximately 23 months, running from early 1990 to the park's opening in March 1992. Construction of the theme park was overseen by a joint venture of two general contractors, Lyda Inc. of San Antonio and Manhattan Construction Company of Tulsa, Oklahoma. The park had four theme sections; Crackaxle Canyon, Los Festivales, Spassburg and Rockville, along with a water park called, Ol' Waterin' Hole. In its third season, 1994, Fiesta Texas added a new themed area, Fiesta Bay Boardwalk, with multiple new rides and attractions including a Ferris wheel, swinging ship, scrambler, and a roller-skating pavilion.

Time Warner took over management and operations of Fiesta Texas in 1996 and added the Six Flags name to the park, while USAA remained as the sole owner. Six Flags Fiesta Texas added its third roller coaster, a Vekoma Hurricane named The Joker's Revenge, which opened to the general public on May 10 of the same year. It was the park's first roller coaster to go upside down and the first ride to be based on DC Comics. The Joker's Revenge featured a funhouse queue line and trains that traveled backward through the course.

Premier Parks, which acquired the Six Flags theme park chain from Time Warner, purchased Fiesta Texas from USAA in October 1998. In 1999, Fiesta Texas saw the biggest expansion ever in park history with more than 10 new rides and water rides, as well a rename of the water park to Armadillo Beach. With the infusion of new rides, the park saw its annual attendance increase by more than one million visitors. Also in 1999, Six Flags Fiesta Texas was awarded Amusement Today's Golden Ticket Award for Best Shows in the theme park industry. The park continued to receive the award every year until 2008.

In March 2006, Six Flags Fiesta Texas expanded its water park and renamed it White Water Bay. The rehab included a redesigned plaza, new food and merchandise facilities and four new waterslide attractions.

The Six Flags company began the process of removing licensed theming company wide across its theme parks from attractions that the park had built in previous years. Six Flags Fiesta Texas had to rename and retheme seven rides as well as the kids theme area from Wiggles World to Kidzopolis, all in time for the 2011 season.

In 2019, the park for the first time in its history, operated at a year-round schedule. Before 2019, Fiesta Texas ran their operating seasons from March to the end of the year. In 2019, the park opened up a new theme area, DC Universe, which included most of the already established DC Comics themed rides, along with the brand new, Joker Carnival of Chaos.

A day before the park's 28th anniversary (March 13, 2020), Six Flags suspended all operations across all its properties due to concerns of the COVID-19 pandemic. During the time of closure, the park donated its food and supplies to a local hospital and food bank. On June 4, Six Flags announced the park would reopen on June 19 to members and season pass holders, and to the general public on June 22.

On July 28, 2021, plans were announced for the park's 30th-anniversary celebration in 2022 which will begin with a New Year's Eve Kickoff Event. Plans include a retheme of the popular Poltergeist roller coaster, a Celebrate 30 Night Show, food festivals, displays, a mini-museum, and a new B&M Dive Coaster, Dr. Diabolical's Cliffhanger. The latter ride officially opened on July 30, 2022.