The site for Stromsburg was selected in 1870 by Lewis Headstrom, member of a townsite company from Galva, Illinois. In 1872 the town was platted and named "Stromsburg," the last syllable of Headstrom's name plus "burg," which in Swedish means "village on the hill."
Headstrom built the first house and store. Businesses were built around a central square reserved for a city park. In 1879 Stromsburg welcomed the Omaha and Republican Railroad, acquired by the Union Pacific in 1898. After a fire in 1887 destroyed most businesses on the west side of the square, a volunteer fire department was organized. A standpipe was erected in 1889.
When the population reached 1,000 in 1888, Stromsburg was incorporated as a second class city with Lewis Headstrom as mayor. In 1912 Buckley Park, a gift from Mr. and Mrs. John Buckley, became a part of the town.
Many of Stromsburg's citizens trace their ancestry to Sweden. In 1966 Governor Frank Morrison declared the town the "Swede Capital of Nebraska." Stromsburg's centennial celebration in 1972 and annual Swedish Festival illustrate its Swedish pride and heritage.