Omaha’s first Italian enclave developed during the 1890s near the intersection of South 24th Street and Poppleton Street. It was formed by immigrants from southern Italy and migrants from eastern American cities. Two brothers, Joseph and Sebastiano Salerno, are credited with creating Little Italy, located further north near the Union Pacific yards in downtown. When Sebastiano took a job as an agent for a steamship company in 1904, he encouraged friends from Sicily to emigrate. Joseph then secured boarding and jobs for the immigrants, particularly in downtown Omaha's Union Pacific shops.In 1905, Sicilian immigrants settled along South 6th Street in the hills south of downtown. Additional waves of Sicilians arrived between 1912 and 1913 and following World War I. South 10th Street was also particularly important to the Italian community.

Originally Little Italy had a small commercial area on South 6th Street extending west along Pierce Street, including a grocery store, clothing and shoe stores, and the Bank of Sicily, established by the Salerno brothers in 1908. The Immigration Act of 1924 was largely responsible for ending large-scale immigration of Italians to Omaha.

During the Prohibition era, much of the Omaha's bootleg liquor was produced in Little Italy. In 1930, Omaha city boss Tom Dennison placed Frank Calamia, a Sicilian living in the neighborhood, in charge of liquor syndicate operations in Omaha's south side. Later, from 1946 to 1951, Calamia controlled the local outlet of a national race wire service, distributed racing results received from the mob-controlled Harmony News Service in Kansas City. According to one expert, Little Italy native Tony Biase was the "leading Mafioso in Omaha" through the 1970s.