The area now known as Old Town was annexed by the City of Chicago in 1851. The population quickly grew and acquired the name North Town. Churches and businesses were established as more and more people moved north and settled in the middle-class German community.

One of the oldest institutions in the neighborhood, St. Michael's Church was built in 1852 at a cost of $730. It included an adjoining school. The members of the congregation were from forty-nine different German states. Attempting to ease the dissension among the different groups, the leaders of St. Michael's used the church to build solidarity in the community by channeling the community's energy into building projects and other programs.

As the community developed, the ethnic make-up of the neighborhood became more variegated. Irish farmers moved toward Clark Street, Italian and French families moved near St. Michael's. The population growth necessitated a larger facility for the church and school. While new facilities were built in 1869, the Chicago Fire of 1871 destroyed the buildings. The existing structure was built a year and three days after the fire.