On November 24, 2006, Lee agreed to a six-year, $100 million contract with the Houston Astros. Since signing with the Astros, Lee has established himself as one of the premier hitters in the National League. Through 22 September, Lee has a .300 batting average and leads the Astros with 113 RBIs and is second on the team in HRs with 30.

His fan base in Houston has grown quickly. He has a fan club called the "Los Caballitos" which means the "little horses" in Spanish referencing his nickname "El Caballo" (The Horse). The club convenes in Minute Maid Park next to the Conoco Home Run Pump in left-center field, where they wear large straw cowboy hats, Carlos Lee number 45 jerseys and ride stick ponies when he hits a home run.