Auburn Hills began as Pontiac Township, including the village of Auburn, in 1821, at what is today the corner of Auburn and Squirrel roads. Situated on the Clinton River, it was named by Aaron Webster, the first settler, for Auburn, New York. His sawmill and grist mill attracted settlers to Auburn. After the streets were laid out in 1826, Auburn rivaled nearby Pontiac until the 1860s, when it lost its own prosperity. The town was renamed Amy in 1880, and it officially became Auburn Heights in 1919. Pontiac Township bordered the city of Pontiac on two sides.

In 1908, automobile pioneer John Dodge bought a farmhouse 3 miles (4.8 km) northeast of Auburn Heights to use as his country retreat. He and his wife, Matilda Dodge Wilson, continued to buy farmland, eventually totaling 1,400 acres. Dodge died in 1920, and Matilda Dodge later married lumber baron Alfred Gaston Wilson, with whom she built one of America's castles, Meadow Brook Hall, on a portion of the estate in present day Rochester Hills at a cost of $4 million ($55.1 million in 2023). In 1957, Matilda Dodge Wilson donated her land to Michigan State University, leading to the creation of Oakland University.

John Dodge's oldest child, Winifred Dodge, married real estate baron Wesson Seyburn, who built his own country retreat 2.5 miles (4.0 km) north of Auburn Heights. The estate included hunting land, dog kennels, a swimming pool, horse stables, and a 5,000-square-foot (460 m) Colonial Revival house. Pontiac Township purchased the estate in 1975, and adapted the buildings for government use. Today, it is known as the Auburn Hills Civic Center.

The first use of the name "Auburn Hills," in 1964, was by Oakland Community College. They named their campus (a former Nike missile base) at Featherstone and Squirrel roads for the town and the hilly terrain in the area. Besides Oakland Community College, Oakland University's campus is partially within the city limits.

The township attempted to incorporate as Pontiac Heights in 1971, but was denied by state officials. Pontiac Township became a charter township in 1978, to protect itself from further annexation. In 1983, Pontiac Township merged with the village of Auburn Heights to become the City of Auburn Hills. It is not to be confused with the similarly named city of Auburn, Michigan, that exists in Bay County, near Saginaw Bay.

According to the United States Census Bureau, the city has a total area of 16.64 square miles (43.10 km), of which 16.60 square miles (42.99 km) is land and 0.04 square miles (0.10 km) (0.24%) is water.

As of the census of 2010, there were 21,412 people, 8,844 households, and 4,923 families living in the city. The population density was 1,289.9 inhabitants per square mile (498.0/km). There were 9,965 housing units at an average density of 600.3 per square mile (231.8/km). The racial makeup of the city was 66.3% White, 18.5% African American, 0.3% Native American, 8.9% Asian, 2.7% from other races, and 3.4% from two or more races. Hispanic or Latino of any race were 7.8% of the population.

There were 8,844 households, of which 27.0% had children under the age of 18 living with them, 38.8% were married couples living together, 12.4% had a female householder with no husband present, 4.5% had a male householder with no wife present, and 44.3% were non-families. 33.5% of all households were made up of individuals, and 7.3% had someone living alone who was 65 years of age or older. The average household size was 2.24 and the average family size was 2.90.

The median age in the city was 31.4 years. 19.4% of residents were under the age of 18; 17.8% were between the ages of 18 and 24; 31.9% were from 25 to 44; 21.6% were from 45 to 64; and 9.4% were 65 years of age or older. The gender makeup of the city was 48.4% female and 51.6% male.

As of the census of 2000, there were 19,837 people, 8,064 households, and 4,604 families living in the city. The population density was 1,194.5 inhabitants per square mile (461.2/km). There were 8,822 housing units at an average density of 531.2 per square mile (205.1/km). The racial makeup of the city was 75.92% White, 13.22% African American, 0.32% Native American, 6.33% Asian, 0.04% Pacific Islander, 1.56% from other races, and 2.61% from two or more races. Hispanic or Latino of any race were 4.50% of the population.

There were 8,064 households, out of which 26.7% had children under the age of 18 living with them; 43.0% were married couples living together; 10.5% had a female householder with no husband present and 42.9% were non-families. 33.1% of all households were made up of individuals, and 6.0% had someone living alone who was 65 years of age or older. The average household size was 2.25 and the average family size was 2.92.

The age distribution is 20.4% under the age of 18, 15.9% from 18 to 24, 38.1% from 25 to 44, 18.2% from 45 to 64, and 7.3% who were 65 years of age or older. The median age was 31 years. For every 100 females, there were 98.3 males. For every 100 females age 18 and over, there were 97.5 males.

The median income for a household in the city was $51,376, and the median income for a family was $60,849. Males had a median income of $45,686 versus $34,015 for females. The per capita income for the city was $25,529. About 3.9% of families and 6.3% of the population were below the poverty line, including 6.4% of those under age 18 and 4.4% of those age 66 or over.

School districts serving sections of Auburn Hills include Avondale School District, Pontiac School District, and Rochester Community Schools.

The Avondale School District operates two elementary schools in the city limits: R. Grant Graham Elementary School and Auburn Elementary School. Portions of Auburn Hills in ASD are zoned to these schools. All ASD residents are zoned to Avondale Middle School in Rochester Hills and Avondale High School in Auburn Hills. Other ASD facilities in Auburn Hills include the district administrative offices and Avondale Montessori. A Pontiac school district school, Will Rogers Elementary School, is located in northeastern Auburn Hills.

Private schools in Auburn Hills include:

• Auburn Hills Christian School
• Oakland Christian School

Private schools near Auburn Hills:

• Notre Dame Preparatory/Marist Academy, Pontiac
• Holy Family Regional School (HFRS) - Consists of a grade PK-3 North Campus in Rochester and a 4-8 South Campus in Rochester Hills. Two churches in Auburn Hills designate HFRS as the parish school: St. John Fisher Chapel and Sacred Heart of the Hills. The first two sponsored the school from the beginning and the other three joined later, with Sacred Heart being the final one.

The main campus of Oakland University sits within Auburn Hills. Oakland Community College is also situated in Auburn Hills.