In the late 1800s, Chinese farmers converted many of Waikīkī's taro and fishponds into duck ponds. This area, including the Ala Moana Shopping Center, was covered with duck farms. Early in the 20th century, Ala Moana Beach was a barren swampland with an old dirt road that saw little traffic. Smoke rose constantly from a smoldering refuse dump near the water’s edge. In 1912, Walter Dillingham purchased the land adjacent to this uninviting waterfront, much to the amusement of his peers.

Most of the acreage was three feet underwater, but Dillingham was no fool. He was in the dredging business, and the swamp was the perfect place to dump all the earth he was removing elsewhere.

In 1931, the City and County of Honolulu decided to clean up the waterfront. A boulevard between this new park and the adjacent property was also built. The new Moana Park was dedicated by President Franklin Delanor Roosevelt in 1934. In 1947, its name was officially changed to Ala Moana. The swimming area was once a boat channel leading from the Ala Wai Canal to Kewalo Basin. In 1955, the ʻEwa (west) end was closed off and a mile of sand was brought in from the Waiʻanae coast. Later, the construction of Magic Island closed off the other end of the channel.

As for the land across the street, Lowell Dillingham came up with an idea in 1949: A shopping center unequaled in the world. Planning, financing, and construction took ten years, but the new Ala Moana Shopping Center, a two-story structure on fifty acres, was ready for opening the same year Hawaiʻi became the 50th State.