The Hebrew city of Afula was founded in 1925 by a Zionist settlement corporation known as the American Zionist Commonwealth.  The corporation purchased the lands of Afula as one unit from a feudal landowner named Aias Sursock a resident of Beirut.  The sharecroppers who cultivated the land for Sursock lived in a tiny village named el-Afuleh, which was situated in the heart of Afula's urban area when built.  Upon the sale of the land of Afula to the American Zionist Commonwealth, the Arab sharecroppers were evicted.

The corporation sold land parcels to settlers from two locations – the U.S. and Poland.  The Polish Jews who purchased the land indeed came to settle there and became the first residents of the city founded in 1925.  Many of the Poles who bought the land perished in the Holocaust.  Later, in the 1990s, upon the wave of immigration from the Soviet Union, the heirs of several of the Polish victims arrived and demanded their inheritance.

A central boulevard was built in the city, with tall palm trees (Washingtonia robusta) planted along its length.  The boulevard, which would eventually be named Arlosoroff Boulevard, served as the city's central commercial and administrative center for many years, until the 1980s.  The tall palm trees became the visual symbol associated with Afula.

Upon its founding, Afula was called 'The Jezreel City of Afula".  In later years the city's name was shortened to simply 'Afula'.

An institution that sustained the high hopes of the city' founders was the Emek Hospital (formerly the Valley Central Hospital and today officially known as the Emek Medical Center), which was established in 1923 and is today one of Israel's finest medical centers.

In the first years of the State of Israel, Afula absorbed thousands of immigrants, most of them from Iraq and Yemen, and some from Romania.  During the days of the transit camps, the city contained three large transit camps.  In time, three residential areas were added to the city, intended for immigrants and inhabitants of the transit camps.

Approximately five kilometers from Afula, two neighborhoods were established on land of the Israel Lands Administration: Afula Illit, established in 1951, is a neighborhood of single family homes and small apartment buildings situated north-west of the Afula-Tiberias road.  Opposite Afula Illit is the neighborhood of Givat Hamoreh, perched on the incline of a mountain that towers to a height of 515 meters above sea level.  Givat Hamoreh is actually mentioned in the bible; its name apparently derives from the word to 'shoot' (in the context of shooting lava), evidenced by the mountain's abundant basalt, i.e., solidified lava. Thus Givat Hamoreh is actually an ancient volcano. 

On February 25, 1973, Afula was formally declared a city, and its local authority converted to a city council.

For many years—starting in the 1970s during which Afula was declared a city, through to the beginning of the 1990s—the number of inhabitants in Afula remained a fairly constant 25,000 or so.  During the decade of the 1990s the city absorbed immigrants from Ethiopia, followed by a large wave of immigration from the former Soviet Union.  As a result, Afula's population grew considerably and as of 2015, totals approximately 47,000 inhabitants