The prison opened in September 1983.[3] The Terrell Unit was originally the Ramsey III Unit. After the previous Terrell Unit (now the Polunsky Unit) in West Livingston, Texas[6] began to receive death row inmates, the facility's namesake, a Dallas insurance executive named Charles Terrell, wanted his name off of the prison; as a result his name was transferred to another prison.[7][8] The Texas Board of Criminal Justice voted to rename the Ramsey III Unit on July 20, 2001.[9]
In 2008 a state investigation began in regards to accusations that a cabal of prison guards is organizing large scale smuggling of goods into the unit.[10] A prison guard at the unit sent a complaint to Jerry Madden, a member of the Texas House of Representatives, saying that corruption was occurring at the unit.[11] TDCJ investigators searched the entire unit.[12] After the investigation on the matter, Anthony Collins, the senior warden, lost his job.[13] TDCJ investigators searched the entire prison to find evidence of corruption.[12] The Texas Senate ordered prison officials to testify in a hearing related to the incident.[14]