San Leandro industry continued to develop during the late 1800s, thanks to the San Francisco, Alameda and Stockton Railroad Company, which offered inexpensive transportation. Built in 1865, the line ran from Alameda to Davis Street, and many factories were located on or adjacent to the rail line. In San Leandro, agriculture continued to be an important industry up until the early 1900s. Cherries were one of the City's most well-known crops and, to honor their importance to San Leandro's development, the first Cherry Festival, a tradition which continues today, was held in 1909.

During and after World War II, San Leandro underwent explosive population growth. For example, from 1940 to 1950, and again from 1950 to 1960, the population doubled and thousands of homes sprang up in the community. In addition to population growth, from April 1942 to October 1965, 87 industrial parcels were annexed to the City, in addition to 27 other non-industrial tracts. Following the war, San Leandro's manufacturing and commercial sectors continued to expand. New shopping centers, such as the Pelton Center on East 14th Street, were opened to meet the expanding residential demand for commercial services. Even the city government underwent change, as the San Leandro charter was revised in 1947 and a new zoning law was passed.

By the late 1960s, the city was largely built out, with almost no land available for development or annexation. Because many of the residents who moved to San Leandro in the 1950s and 1960s have stayed here, San Leandro as of 2007 has a large elderly population, although increasing numbers of families with children have begun moving into the city. In the 1980s, the community's diversity grew as African Americans, Asian Americans, and Hispanics also began moving into the city. In addition, the industrial makeup of the city has been changing, moving away from its traditional manufacturing base toward more of an emphasis on services and warehousing industries.
San Leandro was a 99.99% white community according to the 1960 and the 1970 census. African-Americans were excluded by the use of "covenants" as well as the collusion of real estate agents, some of whom refused to sell houses to African-Americans. The police sometimes harassed African-Americans who crossed the border into San Leandro from Hayward and Oakland.

Jack Maltester served as mayor during this period, being repeatedly reelected between 1958 and 1978 until term limits were enacted. Property taxes were kept low and residents were quite satisfied with their lifestyles. The crime rate was also low, particularly in comparison with neighboring Oakland.

San Leandro became a more diverse city with the massive development of apartment buildings. This diversity has continued to increase, and currently San Leandro is one of the most racially diverse cities in California.

The 1980s brought further land development and some major redevelopment activity. For example the Caterpillar Tractor site was redeveloped to become a large commercial shopping center, the Monarch Center.