The town was laid out with the name North Bloomington on June 7, 1854 by Joseph Parkinson. From its founding, it was generally recognized that Jesse W. Fell was the force behind the creation of the town. He had arranged for the new railroad, which would soon become the Chicago and Alton Railroad, to pass west of Bloomington then curving to cross the Illinois Central Railroad at a point where he owned or controlled land. Most of the original town lies south of these tracks, with Beaufort Street as its northern limit, and some blocks west of the Illinois Central and north of the tracks. Fell, his brothers, and associates quickly laid out many additions to the original town.
The Bloomington area was at the edge of a large grove occupied by the Kickapoo people before the first Euro-American settlers arrived in the early 1820s. Springing from the settlement of Keg Grove, later called Blooming Grove, Bloomington was named as county seat on December 25, 1830, when McLean County was created.
When the County of McLean was incorporated, a county seat was established. However, the legislation stated the site of Bloomington "would be located later." James Allin, one of the new county's promoters, offered to donate 60 acres of his land for the new town. His offer was accepted, and Bloomington was laid out. Its lots were sold at a well-attended and noisy auction on the 4th of July 1831. At this time there were few roads, but rich soils brought new farmers who began commerce by conducting their business in the newly formed county. People came from all over to trade and do business at the town's center, known today as Downtown Bloomington, including Abraham Lincoln who was working as a lawyer in nearby Springfield, Illinois.
In 1900 an officer on patrol discovered a fire in a laundry across the street from the old City Hall and Police Station. He sounded the alarm but the fire destroyed the majority of the downtown, especially the areas north and east of the courthouse. However, the burnt area was quickly rebuilt from the designs of local architects George Miller and Paul O. Moratz.
During the first two decades of the 20th century, Bloomington continued to grow. Agriculture, the construction of highways and railroads, and the growth of the insurance business (mainly State Farm Insurance) all influenced the growth of Bloomington and its downtown area. The downtown area became a regional shopping center attracting trade from adjoining counties.
Bloomington has an estimated population of 78,000