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Railroad suburbs arose almost as soon as the railroad's promise of speedy, reliable transportation to and from cities was grasped. As early as 1831, a New York newspaper speculated that the state's first railroad line, from 23rd Street to the north end of Manhattan, would turn the village of Harlem into a suburb. A decade of ferry service had already introduced wealthy New Yorkers to the idea of living out of town, and regular train service would allow businessmen to settle their families in areas they perceived as healthier, far from the noise, smoke, and unstable immigrants of the city centers where they made their fortunes.

Suburban settlements had many origins, and the railroad suburb was a specific form that arose only in certain places. They are easiest to identify along lines leading into Boston, New York, Philadelphia, Pittsburgh, Cleveland, Chicago, and San Francisco. Even towns along the same railroad line had many different origins: some were industrial satellite towns, while others began as agricultural trading centers or small crossroads villages that were transformed by the arrival of the railroad.

However, many railroad suburbs were developed as full-blown new settlements on previously undeveloped rural land. Industrialists seeking to diversify their investments or railroad officials who understood the promise of commuter service were frequently involved in the enterprises that built a station, negotiated with the railroad to stop there, and subdivided and sold off lots. To attract settlers, developers induced resort hotels, country clubs, and colleges or boarding schools to locate near their holdings. A common pattern was for new stations to attract summer residences of the very wealthy, some of whom took up year-round residence. Upper-middle-class residents who could only afford one house often followed, and eventually smaller houses were offered that even middle-class families could afford.

These new settlements were tied to the central city for services, entertainment, and shopping as well as work. Not only did many breadwinners commute to offices in the central city, but housewives commonly visited the central business district to shop at department stores and specialty shops, or for theater performances. Central city merchants, recognizing the value of this new market, offered home delivery of purchases. By the 1920s, downtown department stores were even setting up branch stores in the larger suburbs.

Frequent stops were inefficient for steam locomotives, so suburban stops were usually spaced several miles apart. Lots were large by city standards, but houses were still clustered along a grid of streets within easy walking distance of the station. Wealthier landowners might have estates further away, and be driven to and from their trains. These patterns naturally limited railroad suburbs to a few thousand inhabitants each, in villages surrounded by a natural greenbelt of market gardens, golf courses, or undeveloped land.

Station buildings, designed in picturesque styles and much more substantial than rural depots, symbolized the community's aspirations. A small business district around the station included grocers, small shops, and eventually, movie theaters. In contrast to city neighborhoods that included corner stores and taverns, railroad suburbs were almost exclusively residential, with only churches and schools interspersed with single-family houses. Downtown business blocks might include a few apartments above the shops. A siding near the station might serve a small lumberyard and coal merchant. Smaller cottages along the railroad line or boardinghouses provided housing for laborers who did not live on the grounds of their employers. Other residents were often excluded, however, by racial restrictive covenants or minimum requirements for the value of new homes.

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