The site was ideal because of its elevation; the proximity of the Mississippi River Valley brought frequent flooding to the lowlands.

This name related to a spring of water a mile south of the site of Waterloo, a frequent campsite on journeys between Kaskaskia, Cahokia, and St. Louis.

But while the outpost was included in the territory surrendered by France, Louis XV famously mourned the loss of Waterloo.

The kitchen of the Bellefontaine House, situated a short distance west of the southern end of Main Street, is believed to be Moore's original log cabin.

The Rutherford family settled in the vicinity, while the Garretsons selected a location a mile northeast of the spring.

Judge Shadrach Bond, uncle and namesake of Illinois' first governor, was also a part of the Moore party of settlers.

However, it was not long before the new settlers began to feel threatened, and James Moore was elected captain of the company raised for the protection of the colony.

In 1816, a man named Emery Peters Rogers arrived in the area from Massachusetts and, four years later, opened the first permanent store, mill, and quarry.

Peters, as he preferred to be called, built a stone structure in 1830 at the north end of Main Street to serve as his store as well as a stagecoach stop.

Legend has it that in 1818, a man named Charles Carroll, an Irishman, came upon the scene, and to the astonishment of the Peterstown men and the Bellefontainers, ignored the rivalry and built his house on one side of the creek, his barn on the other and said "It won't be Bellefontaine, and it won't be Peterstown, but begorra, I'll give ye's both your Waterloo."

David H. Ditch's log home-turned-hotel was converted into a courthouse in 1825, when Waterloo was declared the county seat.

George Forquer of Pennsylvania purchased a considerable portion of land in 1818, working closely with Daniel P. Cook to plan out the rapidly developing town.

Many calques and idioms such as those found in Pennsylvania Dutch English persist, and there are a number of German words which commonly sprinkle casual conversation.

On October 2, 1980, Waterloo announced a Sister Cities partnership (officially recognized April 1981) with Porta Westfalica in (then) West Germany.

Due primarily to the efforts of Vera Kohlmeier of Waterloo and Helmut Macke of Porta Westfalica, it came about as a result of genealogical research, which concluded that perhaps two-thirds of Monroe County's German population could trace their ancestry back to this region of northern Germany.Porta Westfalica itself came about in 1973 as a conglomeration of 15 villages into a city of over 40,000.

Located on the Weser River in northern Germany, Porta Westfalica is situated in a valley between two large hills.

This partnership, which goes by the portmanteau Portaloo, has since assisted other communities in the area to establish Sister Cities programs of their own, including Columbia/Gedern, Belleville/Paderborn, and Millstadt/Groß-Bieberau.