Sunny Lane was on Rocky Creek fourteen miles northeast of Burnet in northern Burnet County. According to local tradition, the community took its name from a "sunny dirt lane" that was often used as a courting lane. A post office was established in the settlement in 1881 with John T. Berry as postmaster. By 1884 the community had two churches, a school, and fifty-five residents; principal shipments from the area included cotton, hides, and farm produce. Sunny Lane also had daily stages to Lampasas and Burnet. The post office was discontinued in 1910, and mail was sent to Lake Victor. A few widely scattered houses appeared on county highway maps of the area in the 1940s, but the community was not marked by name.
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