Sugar City was a company town for the Fremont County Sugar Company, which was part of the Utah-Idaho Sugar Company, supporting a sugar beet processing factory built in 1903–1904. Since it was created to support the factory, construction workers and early factory families were housed in tents, leading to the nickname "Rag Town". By 1904, the town consisted of 35 houses, two stores, a hotel, an opera house, several boarding houses, two lumber yards, a meat market, and a schoolhouse. The first Mormon ward was the Sugar City Ward, with Bishop Mark Austin. One of his counselors was James Malone, a construction engineer for E. H. Dyer, who was not a Mormon. In early years the factory had a labor shortage, leading to a local community of Nikkei—Japanese migrants and their descendants. The city was flooded by the waters of the Teton Dam collapse on June 5, 1976.
As of the census of 2010, there were 1,514 people, 419 households, and 373 families residing in the city. The population density was. There were 434 housing units at an average density of. The racial makeup of the city was 91.3% White, 0.1% African American, 0.4% Native American, 0.3% Asian, 6.7% from other races, and 1.2% from two or more races. Hispanic or Latino of any race were 10.9% of the population. There were 419 households of which 52.5% had children under the age of 18 living with them, 75.7% were married couples living together, 11.0% had a female householder with no husband present, 2.4% had a male householder with no wife present, and 11.0% were non-families. 10.3% of all households were made up of individuals and 5.5% had someone living alone who was 65 years of age or older. The average household size was 3.61 and the average family size was 3.87. The median age in the city was 24.8 years. 39.5% of residents were under the age of 18; 10.7% were between the ages of 18 and 24; 22% were from 25 to 44; 18.7% were from 45 to 64; and 9% were 65 years of age or older. The gender makeup of the city was 48.4% male and 51.6% female.
2000 census
As of the census of 2000, there were 1,242 people, 326 households, and 292 families residing in the city. The population density was 1,582.5 people per square mile. There were 336 housing units at an average density of 428.1 per square mile. The racial makeup of the city was 92.83% White, 0.16% African American, 0.16% Native American, 0.81% Asian, 4.51% from other races, and 1.53% from two or more races. Hispanic or Latino of any race were 8.29% of the population. There were 326 households out of which 57.4% had children under the age of 18 living with them, 80.7% were married couples living together, 7.7% had a female householder with no husband present, and 10.4% were non-families. 8.9% of all households were made up of individuals and 3.1% had someone living alone who was 65 years of age or older. The average household size was 3.81 and the average family size was 4.08. In the city, the population was spread out with 40.6% under the age of 18, 10.9% from 18 to 24, 22.3% from 25 to 44, 19.5% from 45 to 64, and 6.8% who were 65 years of age or older. The median age was 24 years. For every 100 females, there were 101.6 males. For every 100 females age 18 and over, there were 95.8 males. The median income for a household in the city was $45,500, and the median income for a family was $46,333. Males had a median income of $30,139 versus $22,917 for females. The per capita income for the city was $12,737. About 6.1% of families and 7.8% of the population were below the poverty line, including 10.5% of those under age 18 and 2.3% of those age 65 or over.
