Prior to European settlement, the area surrounding the future site of Alliance was, at times, home to First Nations tribes who roamed the plains.

For the next forty years, Alliance continued to serve primarily as a farming hub for surrounding properties, although during the 1940s the community was hit by a two-week-long non-delivery strike by the Alberta Farmers' Union.

[5] Despite the general prosperity of farmers in the 1940s and early 1950s, the increasing replacement of labour by machinery meant that Alliance's population declined sharply, such that seven businesses in the community closed between 1942 and 1954.

Bumper crops in the 1950s caused no granary to be empty in the region, although a lack of demand for grain during the period dampened agricultural prosperity until export sales picked up.

That decade also saw the modernization of Alliance as a community, with approximately one mile of pavement being laid in summer 1954, the installation of cushioned seats in the local theatre, and the construction of a seed cleaning plant.