The city is named after the Vale of Tempe, a gorge in the Tempi municipality of northern Thessaly, Greece. In ancient times, it was celebrated by Greek poets as a favorite haunt of Apollo and the Muses.

The Hohokam people created roughly 135 miles (217 km) of irrigation canals, making the desert land arable. The paths of these canals were later used for the Arizona Canal, Central Arizona Project Canal, and the Hayden-Rhodes Aqueduct. They also carried out extensive trade with the nearby Ancient Puebloans, Mogollon, and Sinagua, as well as with the more distant Mesoamerican civilizations. It is believed periods of drought and severe floods between 1300 and 1450 led to the Hohokam civilization's abandonment of the area.

The settlement was originally called Hayden's Ferry, named after a ferry service operated by Charles T. Hayden. The ferry became the key river crossing in the area. Pioneer Darrell Duppa is credited with suggesting Tempe's current name, which was adopted in 1879.

According to the Tempe City Code, Chapter 22, Article VI, "No person other than a parent or legal guardian shall sell, exchange, give, loan, or otherwise furnish, or cause or permit to be exchanged, given, loaned, or otherwise furnished, any graffiti implement to any person under the age of eighteen (18) years."

The famous Circle K convenience store from Bill & Ted's Excellent Adventure (1989) is located at the intersection of Southern and Hardy in Tempe, Arizona.

Tempe is located in the East Valley section of metropolitan Phoenix. It is bordered by Phoenix and Guadalupe on the west, Scottsdale on the north, Chandler on the south, and Mesa on the east.

Tempe is generally flat, except for Hayden Butte, which is commonly known as A-Mountain for Arizona State University's "A" logo located on its south face. Elevation ranges from 1,140 feet (350 m) at Tempe Town Lake to 1,495 feet (456 m) atop Hayden Butte.

With 330 days of sunshine each year, Tempe has an average temperature of 87.3 degrees.

In 1988, Cold Stone Creamery opened its first store in Tempe, Arizona. The original Cold Stone Creamery, store #0001, is in operation today near the same intersection (southwest corner of McClintock & Southern) as the original Tempe location.

Until the early 1960s, Tempe was a "sundown town" where African Americans were permitted to work but excluded from living by the use of discriminatory laws, harassment, and threats of violence. Although it is difficult to make an accurate count, historians estimate there were up to 10,000 sundown towns in the United States between 1890 and 1960, mostly in the Mid-West and West. In 1965, Warren and Carol Livingston became the first African Americans to buy property in Tempe.