In 1836, during the celebrations that marked the 60th anniversary of the U.S. Declaration of Independence, the community voted to call itself Independence Grove. The next year the village got its first practicing physician, Dr. Jesse Foster, and its first lawyer, Horace Butler, after whom Butler Lake is named.[6] It also got a post office in that year, an event that forced another name change, because of an already existing Independence Grove elsewhere in the state. On April 16, 1837, the new post office (possibly located in Vardin's former cabin) was registered under the name Libertyville.

That was not the end of the town's shifting identities, however. When Libertyville briefly became the county seat of Lake County in 1839, it changed its name to Burlington, only settling on its current name when the seat moved to Little Fort (now Waukegan, which is the Potawatomi word for "Little Fort").[7] Libertyville's most prominent building, the Cook Mansion, was built in 1879 by Ansel Brainerd Cook, almost on the spot where Vardin's cabin had been built in the 1830s. Cook, a teacher and stone mason, became a prominent builder and politician in Chicago, providing flagstones for the city's sidewalks and taking part in the rebuilding after the Great Chicago Fire of 1871. The two-story Victorian mansion served as Cook's summer home as well as the center of his horse farm, which provided animals for Chicago's horsecar lines. The building was remodeled in 1921, when it became the town library, gaining a Colonial-style facade with a pillared portico.[8]

The community expanded rapidly with a spur of the Milwaukee Road train line (now a Metra commuter line) reaching Libertyville in 1881, resulting in the incorporation of the Village of Libertyville in 1882, with John Locke as first village president.[7] Libertyville's downtown area was largely destroyed by fire in 1895, and the village board mandated brick to be used for reconstruction--resulting in a village center whose architecture is substantially unified by both period and building material.[3] The National Trust for Historic Preservation, which gave Libertyville a Great American Main Street Award, called the downtown "a place with its own sense of self, where people still stroll the streets on a Saturday night, and where the tailor, the hometown bakery, and the vacuum cleaner repair shop are shoulder to shoulder with gourmet coffee vendors and a microbrewery."[9]

Samuel Insull, founder of Commonwealth Edison, began purchasing land south of Libertyville in 1906. His eventually acquired 4,445 acres, a holding that he named Hawthorne-Mellody Farms. He also bought the Chicago & Milwaukee Electric line (later the Chicago, North Shore & Milwaukee), which had built a spur from Lake Bluff to Libertyville in 1903. When Insull was ruined by the Great Depression, parts of his estate were bought by prominent Chicagoans Adlai Stevenson and John F. Cuneo.