Santa Claus, Indiana, was established in 1854. In 1856, when the town was (then known as Santa Fe, pronounced "fee") working to establish a Post Office; the US Post Service refused their first application as there was already another Santa Fe, Indiana. Several town meetings were held, during which the name Santa Claus was selected.
The town has the world’s only post office to bear the name of Santa Claus. Because of this popular name, the Post Office receives thousands of letters to Santa from all over the world each year. A group of volunteers known as "Santa’s Elves" ensures each child receives a reply from Santa Claus; this tradition has been around since at least 1914. Every year, the Post Office also creates a special Christmas 'hand cancellation' pictorial postmark for use during the month of December. This practice attracts mail from all over the world wishing to have the official Santa Claus postmark. The pictorial postmark is chosen each year from submissions from art students at the local high school.
Santa Claus is currently home to approximately 2,200 residents. According to the 1990 census, 927 people resided in Santa Claus. By 2000 the town's population had grown to 2,075. A majority of Santa Claus residents live within the gated community of Christmas Lake Village, which was first established in the late 1960s by Bill Koch. It consists of 2,500 acres developed around three lakes: Christmas Lake, Lake Holly, and Lake Noel. The street names in Christmas Lake Village are all themed and named after the Christmas season. Many residents also live in Holiday Village, a subdivision on the north side of town.
Santa Claus is the home to several attractions including: Santa's Candy Castle, Santa Claus Museum, Holiday World & Splashin' Safari, Frosty's Fun Center, Mushie's Car Museum, and Christmas Lake Golf Course.
On June 25, 1895 the Post Office name was changed to the one word "Santaclause", but the name was changed back to Santa Claus on February 17, 1928. It was then that the Post Office Department decided there would never be another Santa Claus Post Office in the United States, due to the influx of holiday mail and the staffing and logistical problems this caused.
The town's unique name went largely unnoticed until the late 1920s, when Postmaster James Martin began promoting the Santa Claus postmark. The growing volume of holiday mail became so substantial that it caught the attention of Robert Ripley in 1929, who featured the town’s post office in his nationally-syndicated “Believe It or Not” cartoon.
The town's new national fame had caught the attention of Vincennes entrepreneur Milton Harris. Harris created Santa's Candy Castle, the first tourist attraction in Santa Claus, Indiana, which is also purported to be the first themed attraction in the United States. Santa Claus Town attractions included a red-brick Candy Castle, sponsored by Curtiss Candy and dedicated December 22, 1935, and the Toy Village, a series of miniature fairytale buildings sponsored by prominent national toy manufacturers. Santa Claus Town led to the creation of the town’s first newspaper, "The Santa Claus Town News," and the Santa Claus Chamber of Commerce.
Harris' project caught the attention of a rival entrepreneur, Carl Barrett, the Chicago head of the Illinois Auto Club. Disliking what he called Harris' materialism, Barrett planned his own tourist attraction "Santa Claus Park." On December 25, 1935, Barrett dedicated a 22 foot tall statue of Santa Claus that was erected on the highest hill in town. The statue was promoted as being solid granite, although it was subsequently revealed to be concrete when cracks formed years later.
Years of lawsuits between Harris and Barrett were costly distractions for the two entrepreneurs. The lawsuits centered around land ownership and went all the way to the Indiana Supreme Court. National news media covered the ongoing story of "Too Many Santas." Over the years both entrepreneur's visions became vacant and neglected.
On August 3, 1946, industrialist Louis J. Koch opened Santa Claus Land, which is claimed to be the first theme park in the world. The park's name was changed to Holiday World in 1984. In 1993 a water park named Splashin' Safari was added, thus the name Holiday World & Splashin' Safari. The park, still owned and operated by the Koch family, attracts more than one million visitors annually.
More recently the development of Christmas Lake Village as a gated community has more than doubled the population of Santa Claus. In 2005, a local development company purchased Santa's Candy Castle and other buildings that comprised Santa Claus Town and announced plans to restore and re-open them to the public. Santa's Candy Castle was the first building of the original Santa Claus Town to be re-opened to the public, when its doors opened on July 1, 2006. Plans exist to re-open the remainder of the original attraction in the future.
The Optimist Club of Santa Claus is the only civic club in Santa Claus. It has 125 members and is very active in serving the community youth.
According to the United States Census Bureau, the town has a total area of 5.6 square miles (14.4 km²), of which, 5.2 square miles (13.4 km²) of it is land and 0.4 square miles (1.0 km²) of it (6.82%) is water.
There were 732 households out of which 39.6% had children under the age of 18 living with them, 79.0% were married couples living together, 4.1% had a female householder with no husband present, and 15.2% were non-families. 12.2% of all households were made up of individuals and 4.0% had someone living alone who was 65 years of age or older. The average household size was 2.79 and the average family size was 3.05.
In the town the population was spread out with 29.3% under the age of 18, 5.0% from 18 to 24, 32.2% from 25 to 44, 24.3% from 45 to 64, and 9.2% who were 65 years of age or older. The median age was 35 years. For every 100 females there were 95.3 males. For every 100 females age 18 and over, there were 94.6 males.
The median income for a household in the town was $60,388, and the median income for a family was $61,991. Males had a median income of $44,514 versus $24,050 for females. The per capita income for the town was $23,957. About 1.0% of families and 1.2% of the population were below the poverty line, including 1.3% of those under age 18 and none of those age 65 or over.
The Indiana Department of Transportation is presently designing and building a new route for U.S. Highway 231, which will place that highway within three miles of Santa Claus. Local officials are touting the new highway as a major tool to draw new economic development. Even if the hoped-for new development does not come, the new highway (a four-lane, limited-access expressway) will improve access to Holiday World and Splashin' Safari and other local attractions.
Indiana 162, the main highway through town (which will connect to the new U.S. 231), is known as Christmas Boulevard. This is in keeping with the Christmas theme of the town. It is also known as the William A. Koch Memorial Highway, so named for the local developer who was responsible for much of the town's development, as well as for the creation of the nearby Lincoln Boyhood National Memorial.