Ramat Gan was established by the Ir Ganim association in 1921 as a satellite town of Tel Aviv. The first plots of land were purchased between 1914–1918. The settlement was initially a moshava, a Zionist agricultural colony that grew wheat, barley and watermelons. The name of the settlement was changed to Ramat Gan (lit: Garden Height) in 1923. The settlement continued to operate as a moshava until 1933, although it achieved local council status in 1926. At this time it had 450 residents. In the 1940s, Ramat Gan became a battleground in the country's language war: A Yiddish language printing press in Ramat Gan was blown up by Hebrew-language extremists.
Over the years, the economy shifted from agriculture to commerce and industry. By 1946, the population had grown to 12,000. In 1950, Ramat Gan was recognized as a city. In 1955, it had a population of 55,000. The first mayor was Avraham Krinitzi who remained in office for 43 years. In 1961, the municipal area of Ramat Gan expanded eastward, to encompass the area that includes the Sheba Medical Center in Tel Hashomer and Bar Ilan University. In 1968, the world's largest diamond exchange opened in Ramat Gan. The Sheba Medical Center and the Israel Diamond Exchange are located in Ramat Gan.