In 1837, Joseph Kettlestrings purchased 172 acres of land just west of Chicago. By 1850, the Galena and Chicago Union Railroad was constructed as far as Elgin, Illinois, and passed through Oak Park. The population of Oak Park boomed during the 1870s, with Chicago residents resettling in the suburb following the Great Chicago Fire of 1871. The Village of Oak Park was formally established in 1902, following a referendum.
Oak Park has a history of alcohol prohibition. From the time of its incorporation, no alcohol was allowed to be sold within its village limits. This law was relaxed in 1973, when restaurants and hotels were allowed to serve alcohol. The law was further loosened in 2002, when select grocery stores were given permission to sell packaged liquor. Population shifts have occurred in recent years, but Oak Park's expansive homes, peaceful parks and an excellent school system have continued to position the village very high among the more desirable suburbs of Chicago and an exceptional place to raise children.

Recently, Oak Park demographics have shifted from long-term, more conservative residents, to younger, urban, more liberal residents. The division between old and new residents was demonstrated by a formal survey of residents taken in 2004, which found that more than half of current residents had lived in Oak Park for less than ten years, and one-third had lived in the village fewer than five.

Some residents of the village have expressed a need to revitalize the village economy, while others characterized the situation as a choice between historic preservation and economic growth. The village has attempted to balance preservation and development. For example, a pedestrian mall on Marion Street in the center of the village was opened to traffic, using brick pavers similar to the original early 20th century street and bluestone sidewalks, intended to highlight the historic character of the area. Even the lighting fixtures were chosen to evoke the look of streetlights that lined the street in the 1920s. The effort to remove the mall from downtown Oak park has won acclaim throughout the region from urban planners and preservationists alike.

Oak Park also is a popular tourist destination in the Chicago area, as many come to view the many Frank Lloyd Wright buildings found throughout the village. In fact, the largest collection of Wright-designed residential properties in the world is in Oak Park. Tourists also come to tour Ernest Hemingway's birthplace home and boyhood home, as well as the Ernest Hemingway Museum. Still others come to view the three Oak Park homes of Tarzan creator Edgar Rice Burroughs.
Oak Park has become famous in the Chicago area and throughout Illinois for its rather impressive Oak Park River Forest High School, which is also the public education school for the bordering village of River Forest. The school is known for its large number of successful alumni, honored teachers, and advanced educational programs.