The community was settled in 1869 by its first known permanent resident, sheep rancher Robert Allison. From the 1860s to 1900 the area was known for sheep and poultry ranching and vegetable crops. In the early 1900s, the community acquired its name when large citrus groves were planted, and lemon and orange growing and shipping became the area's major industry.

The Lemon Grove Incident in 1931 was a boycott of segregated schools by Mexican Americans, resulting in the first court-ordered school desegregation in the United States.