San Leandro was first discovered on March 20, 1772 by Spanish soldier Captain Pedro Fages and the Spanish Catholic priest Father Crespi. Forty-eight years later, to increase settlement and strengthen their claim to the Bay Area, the Spanish gave to retired Spanish soldier Don Luis Maria Peralta a 43,000 acre land grant which he named Rancho San Antonio. In 1842, Don Jose Joaquin Estudillo, also a retired Spanish soldier, was granted 7,000 acres of land in the San Leandro area, which he named Rancho San Leandro.

In 1849 the Gold Rush struck California, and thousands journeyed to the state in search of wealth and prosperity. However, many who were not successful in the gold fields soon moved on to the Bay Area, and settled in the San Leandro area. As a result of this increased settlement, in 1855 John Ward, the son-in-law of Joaquin Estudillo, filed a map of a townsite to be called San Leandro with the County government. From 1856 to 1868, San Leandro was the County Seat for Alameda County until the County Courthouse located at Clarke and Davis Streets was destroyed by the 1868 earthquake. Afterwards, Oakland became the county seat, largely because it was to be the terminal of the proposed Central Pacific Railroad. San Leandro was incorporated as a town on March 21,1872, one hundred years and a day after the area was first discovered.

San Leandro industry continued to develop during the late 1800s, thanks to the San Francisco, Alameda and Stockton Railroad Company, which offered relatively cheap transportation. Built in 1865, the line ran from Alameda to Davis Street, and many factories were located on or adjacent to the rail line. In San Leandro, agriculture continued to be an important industry up until the early 1900s. Cherries were one of the City's most well-known crops and, to honor their importance to San Leandro's development, the first Cherry Festival, a tradition which continues today, was held in 1909.

During and after World War II, San Leandro underwent explosive population growth. For example, from 1940 to 1950, and again from 1950 to 1960, the population doubled and thousands of homes sprang up in the community. In addition to population growth, from April 1942 to October 1965, 87 industrial parcels were annexed to the City, in addition to 27 other non-industrial tracts. Following the War, San Leandro's manufacturing and commercial sectors continued to expand. New shopping centers, such as the Pelton Center on East 14th Street, were opened to meet the expanding residential demand for commercial services. Even the City government underwent change, as the San Leandro charter was revised in 1947 and a new zoning law was passed.

By the late 1960s, the City was largely built out, with almost no land available for development or annexation. Because many of the residents who moved to San Leandro in the 1950s and 1960s have stayed here, San Leandro now has a large elderly population, although increasing numbers of families with children have begun moving in to the City. In the 1980s, the community's diversity grew as African Americans, Asian Americans and Hispanics also began moving in to the City. In addition, the industrial makeup of the City has been changing, moving away from its traditional manufacturing base toward more of an emphasis on services and warehousing industries.

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