Alliance was founded in 1850, after merging the three smaller communities of Williamsport, Freedom and Liberty. A fourth community of Mount Union was added to Alliance in 1888 before Alliance's incorporation as a city during the following year.

Alliance was laid out to bring traffic to the train station, as the railroad was a major contributor to its industry and economy. However, the city's landscape began to change as business and retail moved uptown towards U.S. Route 62, leaving much behind interest in downtown.

However, Downtown Alliance's Main Street is in midst of a revitalization, after city council established the Downtown Special Events Commission on Dec. 17, 2007,

The commission has hosted several seasons of its Summer Concert Series at the Red Caboose, near Main and Mechanic. The Alliance Farmers' Market also is held every Saturday morning between June 15 and October 15,

Jupiter Studios opened its doors early in 2009 with owner Richie Kindler offering the following message posted at his entrance: "The vision: Green, arts-oriented living and a new downtown = happy people." Jupiter offers music, art as well as full audio and video production services.

In June 2011, the Cat Fanciers' Association, the world's largest registry of pedigreed cats, relocated its international headquarters to the former Midland-Buckeye Savings and Loan, where its educational sister organization opened the CFA Foundation Feline Historical Museum. Other entities, such as Arts For Alzheimer's, work towards repurposing properties in downtown Alliance.