St. Peter was founded in 1853 by Captain William Bigelow Dodd, who claimed north of what is now Broadway Avenue. He named the new settlement Rock Bend because of the rock formation at the bend of the Minnesota River. The town site was platted and surveyed in 1854 by Daniel L. Turpin. In 1855, a group of St. Paul businessmen interested in promoting the town formed the Saint Peter Company, and the town was renamed St. Peter. The president of the Company was Willis A. Gorman, Territorial Governor of Minnesota. Many of the streets in St. Peter were named after streets in New York City; Park Row, Chatham, Broadway, Nassau, and Union, for example. Captain Dodd was originally from Bloomfield, New Jersey. His second wife, Harriett Newell Jones, a native of Cabot, Vermont, was living in New York at the time of their marriage at the Church of the Holy Communion in New York City, that church helped fund the church in St. Peter which shares the same name.
In 1857, an attempt was made to move the Territory of Minnesota's capital from St. Paul to St. Peter. Gov. Gorman owned the land on which the bill's sponsors wanted to build the new capitol building, and at one point had been heard saying, "If the capitol remains in Saint Paul, the territory is worth millions and I have nothing." At the time, St. Peter - a city in the central region of the territory - was seen as more accessible to the far-flung territorial legislators than St. Paul, which was in the extreme eastern portion of the territory, on the east bank of the Mississippi River. A bill was passed in both houses of the Territorial Legislature and was awaiting Governor Gorman's signature. The chairman of the Territorial Council's Enrolled Bills Committee, Joseph J. Rolette of Pembina, took the bill and hid in a St. Paul Hotel, drinking and playing cards with some friends as the City Police looked fruitlessly for him, until the end of the legislative session, too late for the bill to be signed. Rolette came into the chamber just as the session ended. One might say that the bill was an attempt to "rob Paul to pay Peter". Today, St. Paul is the second largest city in the state (second only to neighboring Minneapolis), while St. Peter is a relatively small rural town.
In 1866, the Legislature established the first "Minnesota Asylum for the Insane" in St. Peter. It was later known as the St. Peter State Hospital, and is now called the St. Peter Regional Treatment Center.
On July 1, 1892, the Sontag Brothers, John Sontag and George Contant, and their partner, Chris Evans, tried to rob a train between St. Peter and Kasota along the Minnesota River. The bandits acquired nothing of value during this holdup, but their activities came under the review of Pinkerton detectives, and both were apprehended in June 1893 in what is called the Battle of Stone Corral in California.
St. Peter is known as the home of five Governors:
The most well-known of these five governors, John Albert Johnson, was born in St. Peter to Swedish-born parents on July 28, 1861. Because of family circumstances, he offered to help his mother raise the family. He left school at a young age and held a variety of jobs. In 1887, he was hired as editor of the St. Peter Herald, the local newspaper. In 1899, he was elected to the State Senate, and served until 1903. In 1904, he was elected as Minnesota's 16th Governor. He was reelected in 1906 and 1908. In 1912, he was being considered as a possible candidate for President of the United States, but died as the result of an operation for intestinal adhesions in Rochester, Minnesota on September 21, 1909. Dr. William James Mayo and Dr. Charles Horace Mayo, who came from Le Sueur, nine miles (14 km) north of St. Peter and were friends of the governor, performed the operation. After lying in State in the Minnesota Capitol rotunda, his body was taken to St. Peter for burial. The funeral, held at the Union Presbyterian Church, was the largest ever in St. Peter, and he was buried near his parents in Greenhill Cemetery. He was survived by his wife, Elinore "Nora" Preston Johnson.
On March 29, 1998, a tornado struck St. Peter, killing eight-year old Dustin Schneider, injuring dozens more, and damaging much of the town's housing, commercial, and civic buildings. A total of 156 single-family houses and 51 apartment units were destroyed by the tornado. An additional 362 houses and apartments suffered serious damage and 1,383 houses or apartments had minor damage. The town's three trailer parks were largely spared with no mobile homes destroyed and just two seriously damaged. Major losses included the Old Central School, St. Peter Arts and Heritage Center, St. Peter and Paul Catholic Church, St. Peter Evangelical Lutheran Church, and Johnson Hall at Gustavus Adolphus College.