The northern portion of the Vincennes Trace or Vincennes Trail, an Indian trail which ran some 250 miles to Vincennes, Indiana, was called Hubbard's Trace or Hubbard's Trail since it connected Chicago with Gurdon Saltonstall Hubbard's more southerly trading outposts. It took on the name State Road after some state-funded improvements. Vincennes Avenue, one of Chicago's rare diagonal streets, is a vestige of the Vincennes Trace, and further south the trail eventually became Illinois Route 1. In its early days, State Road was unpaved and known for having mud so deep it could allegedly suck down a horse and buggy. In the late 1860s, Potter Palmer embarked on efforts to raise the profile and prestige of State Street. He enticed Marshall Field and Levi Leiter to move their prosperous and growing department store, Field, Leiter & Co., to the corner of State and Washington Streets in 1868, and he built his own Palmer House hotel nearby in 1870. The historic Chicago Theatre is also located on State Street. It was lit by Commercial Light Company in 1958, making it – according to the Chicago Tribune – the brightest thoroughfare in the world.
State Street became a shopping destination during the 1900s and is referred to in the song "Chicago," sung by Frank Sinatra where Frank refers it to "State Street, that great street." In 1979, Mayor Jane Byrne converted the downtown portion into a pedestrian mall with only bus traffic allowed. Mayor Richard M. Daley oversaw the State Street Revitalization Project and on November 15, 1996, the street was reopened to traffic.