The city's history began in 1836, when the settlement of Portersville was established on the site of the ancient Sauk Indian trail. It was originally created as the administrative center for the newly formed Porter County. However, by 1837, the city received its current name—Valparaiso, which translates from Spanish as "Valley of Paradise." This name was chosen in honor of the naval Battle of Valparaiso (Chile), which involved Commodore David Porter, a hero of the War of 1812 for whom the county itself is named.
A combination of several factors played a key role in the city's formation. First, its favorable geographical position on the Valparaiso Moraine—a glacial ridge—provided dry and convenient land for construction, which stood out favorably against the marshy lowlands of the region. Its status as the county seat guaranteed the presence of government offices, which in turn attracted lawyers and merchants. A powerful boost to development came with the arrival of the railroad in 1858, which connected Valparaiso to Chicago and Pittsburgh, turning it into a significant commercial hub.
In its early years, the economy was based on agriculture and flour milling, but the main feature that defined the city's unique cultural identity was education. In 1859, a co-educational college was founded here, which eventually grew into the renowned Valparaiso University. Thanks to this, the city quickly gained a reputation as an intellectual center, and by the end of the 19th century, it was also known as the "City of Churches" due to its abundance of houses of worship.