Lebanon was officially established on April 30, 1830, following the action from the Indiana General Assembly. Lebanon was selected as the county seat later in 1832. In tradition, Lebanon was founded on May 1. This tradition, though well authenticated, is mistaken, as is the assertion that Lebanon was founded in 1831. Lebanon was founded by two young, prominent, Indianapolis men, General James Perry Drake and Colonel George L. Kinnard. Their military titles were derived from their service in the Indiana Militia. Both men, in addition to being progressive community builders, were shrewd developers and speculators. Drake and Kinnard learned early of the planned organization of Boone County and purchased three tracts of land near the geographic center of the new county. The two men knew that this location would be the most likely site for the new county seat and, therefore, would develop as a town. According to Federal Land office records in Crawfordsville, on March 1, 1830, Drake and Kinnard applied for deeds to the land. It is believed that the purchase price was $1.25, per acre, the going rate for property in the area. With the land acquired, it is reasonable to assume that the two men set about platting a town. This “Original Plat” consisted of over 19 blocks surrounding the public square. To ensure that the town would flourish, Kinnard, as Marion County surveyor, surveyed a road from Indianapolis to Lafayette. This road as it lead northwest from Indianapolis through the wilderness would have passed to the west of Lebanon had it not been for an expedient eight-block jog to Main St. before continuing on to Lafayette.

A brief setback was encountered by the speculators when, shortly after the county’s organization, Jamestown has designated the county seat. It did not take the early citizens of the county long to protest this, however. Because of its location in the extreme southwest corner of the county, Jamestown was not well suited for its role as the county seat. In 1832, the Indiana General Assembly agreed that the county seat should be within two miles of the county’s geographic center. To ensure that their property would be selected as the county seat, Drake and Kinnard donated every third lot, the town square, and forty acres of additional adjacent land to the county. In addition, they furnished at no cost the bricks and shingles for the original courthouse. County commissioners readily agreed to this bargain. The honor of naming the town fell on Adam French, one of the first commissioners. Because a cluster of hickory trees reminded him of the Cedars of Lebanon from the Bible, French shouted to a group of onlookers, “The name of this town shall be Lebanon.” In 1839, a two story brick courthouse was built. Until that time, the Boone County Circuit Court met in two different log structures. In 1856, the foundations of the courthouse began to crumble so the building was replaced with a larger more stately brick building costing $40,000. During the construction of this new courthouse, valuable records from the recorder’s were destroyed in a fire. The courthouse of 1856, stood until 1909, when it was razed to make way for the current building. This new building, finished in 1911, at a cost of $265,000, is constructed of limestone from Bedford, Indiana.

As of the census of 2010, there were 15,792 people, 6,433 households, and 4,049 families residing in the city. The population density was 1,014.9 inhabitants per square mile (391.9/km2). There were 7,057 housing units at an average density of 453.5 per square mile (175.1/km2). The racial makeup of the city was 96.1% White, 0.5% African American, 0.2% Native American, 0.6% Asian, 1.1% from other races, and 1.5% from two or more races. Hispanic or Latino of any race were 3.1% of the population. There were 6,433 households of which 32.6% had children under the age of 18 living with them, 46.0% were married couples living together, 11.8% had a female householder with no husband present, 5.2% had a male householder with no wife present, and 37.1% were non-families. 30.9% of all households were made up of individuals and 11.8% had someone living alone who was 65 years of age or older. The average household size was 2.38 and the average family size was 2.97. The median age in the city was 37.5 years. 24.5% of residents were under the age of 18; 8.5% were between the ages of 18 and 24; 26.8% were from 25 to 44; 25.6% were from 45 to 64 and 14.7% were 65 years of age or older. The gender makeup of the city was 48.0% male and 52.0% female.