Valparaiso's early history is only loosely documented — the site first appears on an 1863 map, with no confirmed platting story surviving — but the town was incorporated in 1880. Its name is Spanish for “vale of paradise.”

With a 2020 population of 595 spread across just over half a square mile, Valparaiso reported a median household income of $39,444 and a poverty rate of only 4.2% as of the 2000 Census.