A dead armadillo in the middle of the highway. One of the first images in 1974's The Texas Chain Saw Massacre is the icon of Austin as roadkill.

Make no mistake. The Texas Chain Saw Massacre is an Austin film. Director/co-writer/co-producer Tobe Hooper, co-producer/co-writer Kim Henkel, Leatherface actor Gunnar Hansen – all were UT grads. Teri McMinn, who played the ill-fated Pam, was almost a UT student herself, but after the drama program refused to transfer her credit hours from Trinity University in San Antonio, she took classes at St. Edward's in Austin and waited tables to pay rent on her 22nd Street apartment. Ed Guinn, the wrench-throwing truck driver, played bass with Vulcan Gas Company regulars the Conqueroo before starting up Black Maria Trucking. The film was written and edited in the shadow of the UT Tower (the site of Charles Whitman's deadly shooting spree only 8 years before), and shot in what was then rural central Texas: Bastrop, Leander, Round Rock.

Films had been made in Texas prior to Chain Saw. Multiple retellings of the siege at the Alamo built the legend of the valiant frontiersman, while Giant drenched the cowboy in oil. By the Sixties, indie filmmaking was starting to blossom, but like the studio system, it clung defiantly to the coasts. A bunch of hippies making a zero-budget feature on 16mm had no business making one of the most revered horror films of all time.

Yet they did. Forty years on from its first screening – October 1, 1974 – The Texas Chain Saw Massacre is a horror landmark and a turning point in Texas cinema. It was the first genuine and successful Lone Star State indie. It proved to other filmmakers that they could do it too. But it also changed how Texas was seen and depicted in movies: violent, febrile, the rural past and the modern urban dream clashing. Using what Henkel called "nightmare syntax," the film became a metaphor for the bloody outside world having its vile way with Austin's hippie dream.

This was guerrilla filmmaking at its most extreme, and the tales of the merciless shoot – zero budget, the hellish final 27-hour day surrounded by stinking, rotting meat, and the endless feuds in its aftermath – have been told and retold a thousand times. But there's another history less heard: of Chain Saw's role as a product of Austin in the early Seventies, as a creation and expression of the counterculture, as a screaming response to the redneck cowboy culture that dominated Texas. Before the surviving cast reunites for the Housecore Horror Film Festival (Oct. 23-26), they and filmmakers Henkel and Hooper talked to the Chronicle about Austin in 1974, its nascent film scene, its darker side, and how the horror changed how the world saw the Lone Star State.

Tobe Hooper, director, writer, and producer: I had a few hundred-thousand feet of film behind me, doing TV commercials [local TV commercials with Farrah Fawcett] and documentaries that would get grants, and even went on the road for six months with Peter, Paul and Mary. Then I made a film called Eggshells. It was about a commune house, and one of the real hippie films – not what a producer in L.A. imagining what Berkeley and Austin were like and doing a theatrical version.

Kim Henkel, writer and associate producer: I think [Eggshells'] entire film crew consisted of three people, maybe. It was really backyard filmmaking. Tobe and a few others would show up over at this house on Avenue F, just north of campus, and we'd try some direction to go in on a daily basis. It was something that was almost completely off the cuff, completely spontaneous, and unlike professional filmmaking as we generally understand it to be. I don't think you could do anything like that anymore.

Unfortunately, what they could not pull off was getting Eggshells distributed.

Henkel: At that time, there weren't the ancillary markets that there are today. You got it into the theatre or it sat on the shelf. And Eggshells not being exactly the kind of thing that is going to appeal to theatre owners, it never saw the light of day.

Hooper: Eggshells only played in a handful of university towns around the country. They liked the movie, the students, the hippies, the counterculture, but I discovered a film has to make money. There was only one kind of film I could make without stars, where the subject matter was the star, and that was genre.

In Eggshells, Austin was the star. In Chain Saw, it was the subtext. The five kids who drive into hell could have been guests at the open-air, hippie wedding sequence in Wooldridge Park in Hooper's first movie.

Hooper: Austin was a totally unique place in Texas, and still is, and now one of the unique places in the world. It was all a part of Chain Saw and everything else. There is a big microphone there now. Back then, the big microphone was more or less exclusively in Los Angeles or New York. It was just, as a director, I soak up the things around me, it becomes a part of me, the fish tank I'm in, the psychic energy that causes my thought process.

Henkel: It was a different world then. UT was the premier university in the state, and in those days it was actually inexpensive to go to school. I recall my tuition was about 150 bucks for a semester, so even poor boys could go to school in those days. ... But Austin was a relatively small town during those times, and pretty centralized. There weren't the sprawling suburbs there are today. So unless you were really out in the periphery, you were involved.

Ed Guinn, actor (truck driver): The counterculture was very enclosed. It literally was 50 or 60 people, and we all knew each other. It expanded over time, but we were so outside of the realm.

Teri McMinn, actress (Pam): We considered driving to Round Rock like going to Houston. They actually picked me up every morning when we were shooting because I had a motorcycle and they were worried about anything happening to me. They couldn't afford reshoots.

Henkel: I was working in a bubble, because I didn't know anybody. But there were other people. Bud Shrake [screenwriter, Kid Blue], is a novelist and screenwriter; he was here. Bill Wittliff [Encino Press publisher and screenwriter, Lonesome Dove]was here. We actually edited part of Chain Saw upstairs at Encino Press.

The scene was small, but heavily interlinked. Case in point: Guinn's hiring was a friend-of-a-friend deal.

Guinn: What we would do, certain of the kids who were the cool ones, would be to stand on the corner trying to sell [local satire magazine] the Texas Ranger to the kids going back and forth from class. Then, once a week, we'd have a party for the corner kids, and that was the nexus for the nascent music scene. [TCSM art director] Bob Burns, he was an editor on the Ranger, and he knew that when I came from California, I had a truck. They rented a cattle trailer, I hooked it up to my truck, and the rest is in the Museum of Modern Art.

Henkel: Tobe was associated with Film House, and they had equipment. [Cinematographer] Daniel Pearl had a 16mm camera that he owned. There was actually a lab down on Congress that processed 35, and you could get stuff out of Dallas, but there weren't the rental houses that there are today.

Hooper: I'd already gathered a crew and knew how to do all the jobs myself – only because I had to. So I was able to shoot, film, and edit a documentary with a two-man crew. The experience was already there, out of necessity.

Henkel: George Romero was a powerful influence. He'd really done it before we did. Maybe he didn't come to the public consciousness the way Chain Saw did, but maybe that was just a matter of time. If Chain Saw was the grandfather of all this, then he's the soul of it. It was seeing what he was able to do working with very little, with the same kind of tools that we would have to work with, and he was able to make something really special.

Not everyone was happy about adopting the guerrilla approach.

McMinn: I didn't think I wanted to do the film, because it was a scab film. It was one step away from doing porn. You had no protections and I had no agent, but a friend of mine said, "Just go ahead and do it." I called Kim and he said, "Wear a pair of short shorts, and come along to read."

But this wasn't The Austin Chain Saw Massacre. The filmmakers knew that the rest of the state was not as welcoming.

Gunnar Hansen, actor (Leatherface): Looking back, it's pretty clear, this is a group of Austinites. You had a sense that this was Austin people, and certainly the family is a kind of Austin culture. But beyond that, what it really said, as Kim Henkel, the writer, told me: This was everyone's nightmare – that you live in the city, and two steps outside of the city, you were in a rural nightmare. That certainly applied to Austin. You didn't have to go far and you weren't in this hippie kingdom any more. You get to the edge of town, and it's another person's world, and you just don't fit.

Henkel: I grew up in small towns around the state, so that was not an unfamiliar world to me, and it was not a scary one to me. It was one that could be scary, but only if you confronted it directly. I really didn't have any experience in that world where there was preemptive hostility. It was more like an apartheid society.

McMinn: All of Texas was a cesspool of racism and prejudice. Only nine years prior to us filming this, blacks were still drinking from separate drinking fountains. You can't change people's prejudices in nine years. As far as Austin goes, it would be the only liberal part of Texas.

Liberal? Mostly. The Drag, West Campus, Hyde Park – these were safe zones, the counterculture home base. But this was still Texas in the Seventies.

Guinn: It wasn't so fucking great. The rents were cheap, the streets were dangerous, and you'd get your ass kicked if you had long hair. But the scene hung together, like people on a raft. ... Not being able to get a haircut on the Drag, I would go to the Eastside. I went over and asked [promoter] Ira Littlefield if my band could play his IL Club, but he probably didn't know it was me and a bunch of white kids. That was the beginning of integration.

At the same time, Guinn steered clear of the original Threadgill's, north of the Austin city limits.

Guinn: It was a cowboy scene. It was more comfortable for me to not be there. It was a different town. It wasn't a student town.

Hansen: Yes, it was a bright spot in a bleak landscape, but it wasn't purely this hippie heaven. When I would walk to class at the university, I don't know, countless times, guys would pull up their cars next to me and start screaming obscenities. After all, I had a beard and long hair. Typically with bullies, all I would have to do was turn and step toward them, and they would get this horrified expression and drive off. So they never were a threat because they realized that they had no power. Once you got outside of town, you realized it was a different thing.

Henkel: We were moving from a culture and a society that was essentially rural to one that was essentially urban, and those two things were coming into conflict, both in a very physical way, but also culturally. ... The Texas Chain Saw Massacre [backwoods] family are redneck Luddites. In some senses, the situation they're in is a consequence of technology. It's put them out of employment. They're a family unit that is struggling to survive, to maintain or to cling to the world that they have known. The social environment in which things are changing, in which the foundations of the world that are familiar to them are slipping away. The question is: What can we do as a social unit to maintain our life? And of course, the Chain Saw family violates fundamental taboos. Not only are they able to kill you, but they go one step further and kill you and eat you.

Hooper: This dysfunctional family madness makes sense and is relatable, even if you come from Leave It to Beaver's family. I kind of wanted it to be a documentary. ... What we were seeing versus the creation of a reality we were living in. A San Antonio TV station was sponsored by a beer company, and their six o'clock news is truly ghastly, and everyone was tuning in. These were the people with the cameras who stopped on I-35 to get close-ups when things went all crashing bad.

All that bitterness and fear is present in the film, but it still had its supporters. (Side story: In 2007, when the Texas Legislature started funding the Texas Moving Image Industry Incentives Program, they added a clause to the rules saying that a film could be denied funds for making Texas look bad. Of course, the running joke is that TCSM, the film that built the Texas film industry, would never get funded.) Back in 1974, one of its biggest boosters was the state's film commissioner.

Henkel: Ron Bozman, who was the production manager on Chain Saw, he and [Film Commissioner] Warren Skaaren went to Rice University together. Warren was student-body president, and Ron was a student there. Skaaren was instrumental with putting us together with some of the people who wound up investing in the film, so he did indeed contribute to, and, I would say, came up with the final version of the title. We'd used Headcheese and Leatherface, but these were clearly working titles. We were tossing things around, Texas and chainsaws and that sort of thing, and he came up with The Texas Chain Saw Massacre.

Hansen: One of the guys in the crew said that when they changed the name, he was really dismayed because he thought it was an unfair portrayal of Texas. He quickly changed his mind when he realized how effective the title was. But there is this reaction, that somehow we're painting a picture of what Texas really is. First they kill John Kennedy, then this!

If the crew had been hoping for a gentler reception from critics, they had a shock coming.

Hansen: I remember watching TV one night and Johnny Carson was ranting about this movie, and saying, "How dare they give this an R rating. This should be an X!" And my response was, "How dare Johnny Carson decide this movie isn't worthy of being watched by adults!" ... The reviews were brutal. The London Times said, "The less said about Tobe Hooper's Texas Chain Saw Massacre, the better."

Henkel: There was a little local press, but that's about it. There was a little initial excitement that faded. Other local filmmakers were either supportive or political, depending on what their needs were. But it just did not make that much of a splash. ... New Line Cinema, which acquired it by a long chain of events, re-released it in 1980 or 1981, and many people thought that was its official release.

McMinn: I had to take it off my résumé. You'd go into a theatre audition, and they'd say, "What the hell is that?" They didn't say, "Oh, that's a cult masterpiece." ... The time I realized that it was something was when Gunnar came to my store and asked me to sign pictures so he could sell them at conventions.

Hansen: Then [The New York Daily News critic] Rex Reed pops up and says it's the scariest movie he's ever seen, and the floodgates opened.

Hooper: It went from zero to Rex Reed giving it a great review, to the New York Museum of Modern Art's permanent collection and Directors' Fortnight at Cannes.

Forty years later, the legacy is intact. The little Texas indie launched a franchise and the careers of Henkel and Hooper, and created a cultural icon in Leatherface. But, most importantly, its depiction of a merciless Lone Star State has become a cinematic standard. You can scarcely say "Texas" without adding "Chain Saw."

Rebecca Campbell, executive director, Austin Film Society: I've heard TCSM described many times as the original Texas indie, and also the launch of Texas as a serious film-production state.

Duane Graves, director, Boneboys, The Wild Man of the Navidad: I think it also proved that moviemaking could be done not just in L.A., but here, in our own backyard, completely within the city limits of our cozy little town. That definitely helped usher in a new wave of filmmakers to the area, such as Eagle Pennell with The Whole Shootin' Match and the Coen brothers with Blood Simple. It's the first film to accurately depict Texas as the truly frightening, larger-than-life villain it can be. The manner in which the filmmakers lensed the Lone Star State's harsh, desolate landscapes and dusty, deserted back roads has been cloned countless times ever since, yet never has anyone quite hit that same mark. The Texas Chain Saw Massacre is the gold standard for depicting Texas in genre cinema.

Jonny Mars, actor, producer: As I've matured, I've come to understand one thing – this is Texas. This is the Wild West. This is libertarianism. The cowboy isn't gone. He's in the old house eating people. We eat our own in this state. The politics tend to benefit the self, not society at large. Leatherface is the patron saint of Texas-bred, political solipsism. And he's gonna eat our children.

Ed Guinn, Gunnar Hansen, and Teri McMinn will participate in the official 40th anniversary reunion of The Texas Chain Saw Massacre at the Housecore Horror Film Festival, Oct. 23-26; details at www.housecorehorrorfilmfestival.com. A digitally restored Blu-ray collector's edition was released in September by Dark Sky Films.