Katy residents often split the city into two informal sections: "Old Katy" (or Katy Proper) and "Katy Area". Old Katy is the actual city limits of Katy and lies mostly north of Interstate 10. This is the original Katy from before the 1970s when Houston's Energy Corridor (and the development that came with it) made its way west on I-10.

The "Katy area" is made up of large sections of unincorporated Harris and Fort Bend counties and mostly sits east and southeast of the city limits of Katy. This area is within the Katy Independent School District and nearly everyone in this area has a Katy postal address.

The Katy area includes new upscale developments and master planned communities such as Cinco Ranch, Wood Creek Reserve, Grayson Lakes, Seven Meadows, Firethorne and Grand Lakes, while also encompassing developments from the 1970s and 1980s such as Memorial Parkway, Kelliwood and  Nottingham Country.

All of the "Katy area" lies in the city of Houston's extraterritorial jurisdiction (ETJ), not Katy's ETJ. This means that the areas of "Katy area" are controlled by the city of Houston and the city has the ability to annex it in the future. The city of Katy cannot annex this area unless the city of Houston releases the area's ETJ to Katy, which has occurred in several small chunks in recent years. The most recent instance of this was in 2001 when Houston ceded about 400 acres (1.6 km²) of ETJ to the City of Katy to allow the Katy Mills Mall and surrounding parking lot to be built entirely within the City of Katy.

The Smith Family Team live in and specialize in listing and selling real estate in both 'Old Katy' and the 'Katy Area'.