Arbor Day was established by J. Sterling Morton of Nebraska City, Nebraska in 1872.

J. Sterling Morton and his wife moved from Detroit, Michigan to the Nebraska Territory in 1854 , where he was the editor of Nebraska's first newspaper. His influence as a journalist led to his involvement in politics, and he became a promoter of the settlement of Nebraska. The lack of trees, however, was an obstacle.

The Great Plains had been described as the "Great American Desert." The tallgrass prairie that covered much of Nebraska at that time could provide rich farmland, but without wood for building houses or for fuel to heat homes, few found it convenient to settle there. Even the allotment of free land by the Homestead Act failed to entice sufficient numbers of families to relocate to Nebraska.[citation needed]

Morton first proposed Arbor Day as a tree planting holiday in 1872 at a meeting of the Nebraska State Board of Agriculture. On the first Arbor Day, April 10 1874, prizes were offered to counties and to individuals for properly planting the largest number of trees. It was claimed that more than 1 million trees were planted in Nebraska on that day.

April 22, Morton's birthday, was selected as the date for its permanent observance.

During the course of the 1870s, several other states passed legislation to observe Arbor Day. Schools began to adopt the tradition beginning in 1882. By 1894, Arbor Day was celebrated in each state of the United States.

Morton's home in Nebraska City, Arbor Lodge, is a state historical park, which includes an arboretum and extensive landscaped grounds. Adjacent to the public park, Morton's farm, now called Arbor Day Farm, is run by the National Arbor Day Foundation