Prior to the organization of Madison County, William Conner entered the land upon which Anderson is located.

The city is named for Chief William "Adam" Anderson, whose mother was Lenape and whose father was of Swedish descent.

Chief Anderson's name in Lenape was Kikthawenund, meaning "creaking boughs".

However, with the completion of the Indianapolis Bellefontaine Railroad, as well as their station in 1852, Anderson burst to life.

Anderson grew to such proportions that a Cincinnati newspaper editor labeled the city "The Pittsburgh on White River".

Charles Henry, a large stock holder, coined the term "Interurban" in 1893.

The city had left its gas-powered lights on day and night, and there are stories of a pocket of natural gas being lit in the river and burning for a prolonged period for the spectacle of it.

From 1913 through the 1950s, the Ward-Stilson Company was one of the country's largest producers of uniforms, regalia, furniture and props for the Freemasons, the Odd Fellows, and dozens of other U.S. fraternal organizations.

Anderson Bible School was opened in 1917, and this was separated from Gospel Trumpet (now known as Warner Press) in 1925.

Many other inventions were perfected in Anderson, including the gas regulator (Miron G. Reynolds), the stamp vending machine (Frank P. Dunn), clothes presser (H. Donald Forse), "Irish Mail" handcars (Hugh Hill), flower car for funeral homes (Francis M. McClain, automatic gearshift[citation needed] (Von D. Polhemus)), Sisson choke (Glenn Sisson), and the vulcanizing process to retread tires (Charles E. Miller).

The Anderson Packers were a founding member of the NBA (under that name), but folded after one season.

[7][8] Like most other industrial cities in Indiana and the Rust Belt as a whole, Anderson suffered tremendously from deindustrialization in the 1970s and 1980s.

For example, nearly 22,000 people were employed by General Motors in the 1970s in Anderson; by 2006 this number had declined to fewer than 2,600.

[9] The city of Anderson occupies all of Anderson Township except for the much smaller communities of Country Club Heights, Edgewood, River Forest, and Woodlawn Heights, as well as small parts of five other townships: Lafayette, Richland, Union, Adams, and Fall Creek.

Indiana State Road 32 (14th Street) crosses the city center, leading east-northeast 19 miles (31 km) to Muncie and west-southwest the same distance to Noblesville.

Interstate 69 crosses the southeast corner of the city, with access from Exit 226 (SR 9/SR 109).

[18] Nevertheless, in 2007, Anderson was ranked 98th in the Forbes List for 100 Best Places for Businesses among Smaller U.S. Metro areas.

[19] However, a more recent (2014) appraisal of Anderson from the Indiana Business Review was mixed, noting that "long-term trends are negative", citing "a long-term downward trend in area employment" and "acceleration in the number of food stamp recipients".

[21] Madison County, of which Anderson is the seat, has nearly three times as many food stamps recipients per capita as does Indiana as a whole.

In 1997 Madison Heights was closed and Anderson High School moved into that facility.

High school cadets are all members of the Air Force JROTC program.