The census-designated place was founded in 1959 when Jack McRae, president of the Arizona City Development Corporation, purchased and developed 2.5 acres (1 ha) of land in the Santa Cruz Valley in the area that would eventually grow to become the 6.2 square-mile modern day townsite. The location was selected because of the abundance of deep water from the Santa Cruz River found in the valley. At the time, the water was considered some of the purest in Arizona; every 14 days samples were sent to the state Health Department and would come back consistently rated 100% pure. As the community grew, a United States Post Office was established on April 1, 1962, and Arizona City began appearing on Rand McNally road atlases in 1963. It is uncertain how the name of the community was chosen.