Early development of the area was slow, as the sandy soil, part of the Banksia sandplain, was considered unsuitable for agriculture.

Much of Dianella was subdivided in the 1880s by the Intercolonial Investment Company of Sydney, but growth was still slow and by 1919, the only development was along Walter Road, a track leading to dairy farms in the Morley area.

Despite a small but steady stream of Jewish immigration from South Africa and China, specifically Kaifeng, the community in Dianella and surrounding suburbs is shrinking as many young people leave Perth, mainly heading to the larger Australian Jewish communities in Melbourne and Sydney.

Today, there is a Greek day school (St Andrew's Grammar) which is located in the St Andrews Land Estate and a small Greek Orthodox Church (Agios Nectarios) located in the northern sector of the suburb just next to the Dress Circle Land Estate.

Some streets in the northern sector of the suburb have names of Greek origin such as Hellenic Drive in the St Andrews Land Estate.