The city was founded in 1937 by real estate developer and state legislator Homer C. Ludden, who named it after his hometown of Suprise, Nebraska. Although there were only a few houses and a gas station on the one-mile-square parcel of land when Ludden subdivided it to build inexpensive houses for agricultural workers, Surprise has experienced tremendous growth in the years since.
Tens of thousands of retirees moved to the city in the 1990's and early 2000's to live in Sun City Grand, an age-restricted resort-like community, with homes built by the property development firm Del Webb. Surprise is about five miles northwest of Del Webb's original Sun City development and adjacent to Sun City West.
Since it opened in 1996, Sun City Grand has become a large contributor to the city's population, which more than septupled from 10,187 to about 75,000 in 2004. The city's population is now considerably larger than Ludden's hometown, which had a population of 44 in the 2000 United States Census.
Rapid growth has led city officials to estimate the population at over 103,000 as of 2007, a figure the city maintains in spite of more conservative population estimates by the Census Bureau. Thirty-two of the state's top 50 homebuilders cater to new homebuyers, who are attracted by the city's modestly-priced homes, its relative proximity to Phoenix, and by the property taxes, which the city claims are among the lowest in the state.