According to the United States Census Bureau, the city has a total area of 0.9 square miles (2.4 km²), all of it land. Shallowater was also home to the 2004 Boys and Girls State Championship basketball teams.
There were 745 households out of which 42.6% had children under the age of 18 living with them, 65.1% were married couples living together, 11.4% had a female householder with no husband present, and 20.8% were non-families. 19.5% of all households were made up of individuals and 10.1% had someone living alone who was 65 years of age or older. The average household size was 2.80 and the average family size was 3.21.
In the city the population was spread out with 29.8% under the age of 18, 8.4% from 18 to 24, 27.0% from 25 to 44, 22.3% from 45 to 64, and 12.4% who were 65 years of age or older. The median age was 36 years. For every 100 females there were 92.3 males. For every 100 females age 18 and over, there were 85.7 males.
The median income for a household in the city was $38,750, and the median income for a family was $44,491. Males had a median income of $32,383 versus $21,964 for females. The per capita income for the city was $16,752. About 8.6% of families and 9.4% of the population were below the poverty line, including 11.1% of those under age 18 and 9.5% of those age 65 or over.