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The town is named after Karnak, Egypt (near modern-day Luxor). It was thought that the community's alignment with the city of Port Caddo was relative to that of Karnack and Thebes. The town is the birthplace and location of the childhood home of First Lady Lady Bird Johnson. It is also the home of the Longhorn Army Ammunition Plant.
Karnack is served by the Karnack Independent School District. Karnack Elementary School and Karnack Junior/Senior High School serve the community.
Karnack has many small family-owned businesses such as the 4J Ranch, Circle S Grocery, Mystique Tours and The Run In. There was a Big Pines Lodge, which burned down in a construction fire in 2009. However, plans are to reopen the lodge along with its restaurant.
Karnack is situated on the shores of Caddo Lake, the only natural lake in the state of Texas. The lake is a bayou that is known for its beautiful scenery and great fishing. The community of Karnack is deep in the pine woods of Northeast Texas and is mostly farm and timber land.
According to the Handbook of Texas, Caddo Lake was one of the largest natural lakes in Texas before the construction of Caddo Dam. While known as Texas' only natural lake, there are many small natural lakes throughout much of Texas.