Sterling was platted in 1870 when the Atchison and Nebraska Railroad extended a line to the site, and it was named after Sterling, Illinois. Like many Johnson County towns, its founding was a direct product of the post-Civil War railroad-building boom across southeastern Nebraska.

Sterling is a village with ZIP code 68443, and its population has been essentially stable — 507 (2000), 476 (2010), 482 (2020 Census). It's best known today for hosting the Johnson County Fair each August and for its Antique Tractor & Machinery Show (started 1983), which received a U.S. Library of Congress "Local Legacy" honor in 1999. Author and naturalist Hal Borland came from Sterling, and the community's adopted motto is "Small Town...Big Heart."