In June of 1891, a posting was made stating "whereas, at an election held on the fourth day of June, 1891, a majority of the inhabitants of the territory proposed to be organized as the village of Yellow Creek." The vote passed and Stephenson County judge George Wolf set June 30th as the day to elect the newly formed village's first board. The first village board meeting was then held on July 1st, 1891.
In 1892, residents of the village voted to change the name from Yellow Creek to Pearl City. In March of 1893, the Secretary of State issued a certificate stating the proposed name (Pearl City) had not been adopted to any village in the State of Illinois and from that point forward, the village was known as Pearl City.
The name 'Pearl City' is believed to have come from a story about a resident named Daniel Ditzler and his finding several pearls along the Yellow Creek in the late 1880's. The story says he sold one for $800 and used the money to build a new house. It is believed that some of his descendants still have some of the pearls that Daniel found. No other pearls were ever found in the Yellow Creek after Daniel's finds.
In September 1893 a hose company was formed, consisting of 13 members. Also in September 1893, the Masons purchased a lodge in Pearl City. The school was built in 1912 and although it has been remodeled and added onto numerous times, is still the school in use today.
Highland cemetery was started in 1921. The first Homecoming celebration was held in September, 1929 with events such as sack races, tug of war, a parade and a dance in the opera house. The first 4-H club was formed in July, 1932. On November 5, 1941 boy scout troop 27 was chartered as Pearl City's first boy scout troop.
The Pearl City library was formed in 1946 and by the end of the first year had issued 151 library cards. Later, in 1965, a referendum was passed creating an official library district, allowing for taxes to be collected to support the library. American Legion post 1014 was created on July 18, 1946.
On March 25, 1948 the Pearl City Fire Protection District was formed to provide fire protection for Pearl City and the surrounding areas (Loran, Kent). The first twelve grade consolidated school district in Stephenson County was Pearl City Community Unit School District number 200 formed in 1949 with over 300 students.
Pearl City was lucky to have railroad tracks running through town for a long piece of its history. The railroad was responsible for much of the growth and livelihood during the early years of Pearl City. In 1956, the last passenger train ran through Pearl City, but freight trains continued to run through town until 1972. In May of 1973, the tracks were removed. A park district was formed on May 16,1970.