At the falls of the Sioux River, this city has been developing at a constant pace since it was reestablished in 1865, having been abandoned in 1862 after threats of a Lakota attack. Its prosperity is based on diversified industry and farming. Cattle are shipped from a three-state area, slaughtered, and packed here, then shipped east. Manufactured goods from the East are distributed throughout much of South Dakota from Sioux Falls.

Jean Nicolet saw the falls here in 1839 and described them impressively. The Dakota Land Company of Minnesota (1856) and the Western Town Company (1857) of Dubuque set out to develop the area and apparently worked together successfully. In September, 1858, the thirty-odd residents elected members to a Territorial Legislature, casting (it is said) votes for all their relatives as well as for themselves. On July 2, 1859, the first Sioux Falls newspaper, the Democrat, appeared.

Sioux Falls is the center for EROS (Earth Resources Observation Systems), an international center for space and aircraft photography of the Earth.