Most accounts report that the Toyland Parade started in 1936, although merchant-sponsored Christmas Festivals in North Park probably dated back to the early years of the depression. The business community began to organize in the early 1920s, with the North Park Business Club fully functioning by 1924 and the club's Women's Auxiliary raising money for a community sign as early as 1925. The North Park sign was dedicated in July 1935 in time for the California Pacific International Exposition in Balboa Park. In 1940, the Business Club purchased 20,000 feet of new Christmas lights to decorate University Avenue.
Local papers did not report on the 1936 parade, but 100 floats participated in the 1937 parade. The 1937 Christmas Festival was chaired by Paul Hartley who was a local realtor, developer and a son of North Park's founding family. In 1939, the parade was held on a Friday night, included 3 bands and lasted for over an hour. The winning float was not identified, but the San Diego Union said that the Klicka Lumber Company float won second prize; Harrington Appliances won third and the North Park Lions Club won fourth. The three winners identified winners were all local to North Park.
The 1941 parade was scheduled for the evening of December 12th. Following the Japanese attack on Pearl Harbor, the evening parade was cancelled. San Diego and the rest of the west coast were placed under a mandatory blackout in fear of Japanese attacks on the mainland. North Park's Toyland Parade was not held for five years during World War II.
The parade grew in size and parade units became more interesting following the war. For the first time, 30 inflated balloon figures were part of the 1949 parade. Live reindeer pulled Santa's sleigh as 300,000 people watched from North Park's sidewalks in 1954. Although rescheduled due to rain, there were 40 Floats and 2,500 persons marched in the 1955 parade.
The selection of the Toyland Parade Queen became a major County-wide event during the 1950s. In 1956, 15-year-old Kathy Huffman of El Cajon won the competition over 36 "final" contestants for Queen. Kathy was sponsored by the Miramar Naval Air Station. The California Baton Twirling Champion also marched in the parade during the 1950s. Sometime before the 1958 parade, the North Park sign was replaced and changed to read "North Park - Home of the Famous Toyland Parade."
The 1957 parade included 35 floats, 65 horsemen, 25 bands & 20 miscellaneous units. The parade lasted two and a half hours during a day with temperatures reaching into the 80s. The parade became a regional event, with the Ramona Chamber of Commerce winning the grand prize for its float in 1957. Jay North, who played Dennis the Menace on a top-rated television series, was the parade's 1962 Honorary Grand Marshall.
The North Park Sign was removed for repair in 1967 and was never returned. By 1990, the sign had been lost. The parade was not held in 1968 due to the construction of the I-805 freeway. In announcing the cancellation, the San Diego Union identified the Toyland Parade as San Diego's largest Christmas Parade. Neither the sign nor the parade returned to North Park for more than 20 years, as shopping shifted into more-suburban shopping centers.
In the late 1980s, the Toyland Parade was reactivated and has continued since then, although the 2007 Toyland Parade was cancelled due to rain. In 1993, some five years after the return of the parade, a new replica of the North Park Sign was placed on University Avenue, just west of Thirtieth Street.