Gaspar de Portolà arrived in the area that would become Beverly Hills on August 3, 1769, travelling along native trails which followed the present-day route of Wilshire Boulevard. The area was settled by Maria Rita de Valdez and her husband in 1828. They called their of property the Rancho Rodeo de las Aguas. By the 1880s the ranch had been subdivided into parcels of and was being rapidly bought up by anglos from Los Angeles and the East coast.
Charles Denker and Henry Hammel acquired most of it and used it for farming lima beans. At this point the area was known as the Hammel and Denker Ranch. By 1888, Denker and Hammel were planning to build a town called Morocco on their holdings.
In 1900, Burton Green, Henry E. Huntington, and a syndicate of investors formed the Amalgamated Oil Company, bought the Hammel and Denker ranch, and began looking for oil. They didn't find enough to exploit commercially by the standards of the time, though. In 1906, therefore, they reorganized as the Rodeo Land and Water Company, renamed the property "Beverly Hills," subdivided it, and began selling lots. The development was named "Beverly Hills" after Beverly Farms in Beverly, Massachusetts and because of the hills in the area. The first house in the subdivision was built in 1907, although sales remained slow.
The subdivision was one of many all white planned communities started in the Los Angeles area around this time. Restrictive covenants prohibited non-whites from owning or renting property unless they were employed as servants for white residents. It was also forbidden to sell or rent property to Jews in Beverly Hills.
Burton Green began construction on the Beverly Hills Hotel in 1911. The hotel was finished in 1912. The visitors drawn by the hotel were inclined to purchase land in Beverly Hills, and by 1914 the subdivision had a high enough population to incorporate as an independent city. That same year, the Rodeo Land and Water Company decided to separate its water business from its real estate business. The Beverly Hills Utility Commission was split off from the land company and incorporated in September, 1914, buying all of the utilities-related assets from the Rodeo Land and Water Company.
In 1919, Douglas Fairbanks and Mary Pickford bought land on Summit Drive and built a mansion, finished in 1921 and nicknamed "Pickfair" by the press. The glamor associated with Fairbanks and Pickford as well as other movie stars who built mansions in the city contributed to its growing appeal.
By the early 1920s the population of Beverly Hills had grown enough to make the water supply a political issue. In 1923 the usual solution, annexation to the city of Los Angeles, was proposed. There was considerable opposition to annexation among such famous residents as Mary Pickford, Will Rogers, Douglas Fairbanks, and Rudolph Valentino. The Beverly Hills Utility Commission, opposed to annexation as well, managed to force the city into a special election and the plan was defeated 507 to 337.
In the early 1930s, Santa Monica Park was renamed Beverly Gardens and was extended to span the entire two-mile (3-kilometer) length of Santa Monica Boulevard through the city. The Electric Fountain marks the corner of Santa Monica Blvd. and Wilshire Blvd. with a small sculpture at the top of a Tongva kneeling in prayer. In April 1931, the new Italian Renaissance-style City Hall was opened.
In the early 1940s, black actors and businessmen had begun to move into Beverly Hills, despite the covenants allowing only whites to live in the city. A neighborhood improvement association attempted to enforce the covenant in court. The defendants included such luminaries as Hattie McDaniel, Louise Beavers, and Ethel Waters. Among the white residents supporting the lawsuit against blacks was silent film star Harold Lloyd. The NAACP participated in the defense, which was successful. In his decision, federal judge Thurmond Clarke said that it was time that "members of the Negro race are accorded, without reservations or evasions, the full rights guaranteed to them under the 14th amendment." The United States Supreme Court declared restrictive covenants unenforceable in 1948 in Shelley v. Kraemer. A group of Jewish residents of Beverly Hills filed an amicus brief in this case.
In the late 1990s, the Los Angeles County Metropolitan Transportation Authority (LACMTA) proposed to build an extension of the Metro Red Line along Wilshire Boulevard and into downtown Beverly Hills. The city opposed it and it was never built.
In 2001, LACMTA proposed a bus rapid transit route down Santa Monica Blvd., but this was also opposed by the city and never built. Currently this stretch of road is served by less efficient Metro Rapid buses using pre-existing roadways. By 2010, traffic in Beverly Hills and surrounding areas had grown bad enough that the city's habitual opposition had largely turned to support for subways within the city limits. As part of the Westside Subway Extension project, the Purple Line of the LA Metro Rail will be extended through Beverly Hills, adding two underground stations at Wilshire/La Cienega and Wilshire/Rodeo by the 2020s.