Bellaire was founded in 1908 by William Wright Baldwin, who was the president of the South End Land Company. Baldwin, a native of Iowa, was well known as the vice president of the Burlington Railroad. Bellaire was founded on what was part of William Marsh Rice's 9,449 acres (38.24 km2) ranch. Baldwin surveyed the eastern 1,000 acres (4.0 km2) of the ranch into small truck farms. He named those farms "Westmoreland Farms". Baldwin started Bellaire in the middle of "Westmoreland Farms" to serve as a residential neighborhood and an agricultural trading center. South End Land Company advertised to farmers in the Midwestern United States. Baldwin stated that the town was named "Bellaire", or "Good Air" for its breezes". Bellaire may have been named after Bellaire, Ohio, a town served by one of Baldwin's rail lines.
Six miles of prairie was a buffer zone between Houston and Bellaire. Originally the town was bounded by Palmetto, First, Jessamine, and Sixth (now Ferris) Streets. In 1910 Edward Teas, a horticulturist, moved his nursery to Bellaire from Missouri so Teas could implement Sid Hare's landscaping plans. Bellaire was incorporated as a city with a general charter in 1918, ten years after its founding. Bellaire had a population of 200 at the time. Because of the 1918 incorporation, Houston did not incorporate Bellaire's territory into its city limits, while Houston annexed surrounding areas that were unincorporated.