Written by Townes Van Zandt, although Willie Nelson's version might be better known. An interesting story on the origin of the song:

Townes had dozens of stories about how his famous outlaw ballad Pancho and Lefty came about. In one version Van Zandt couldn't find a motel within thirty miles of Dallas because the Guru Maharaji and Billy Graham, along with thousands of their faithful flock were both in town at the same time and there was no room at the inn for the weary Texas troubadour.

Source: http://www.townesvanzandt.com/BIOGRAPHIES.html