The LGBTQ community in Chicago is one of the United States' most prominent, especially within the Midwest, alongside those of San Francisco and New York City, and holds a significant role in the progression of gay rights in the country. With a population of around 3 million, Chicago is the third biggest city in the US, and around 150,000 of those people identify as lesbian, bisexual, gay, transgender, questioning, or another LGBTQ+ identity.

Gay neighborhoods in Chicago have existed since the 1920s, when there was homosexual nightlife in Towertown, adjacent to the Water Tower. Increasing rents during the middle of the 20th century forced gay-friendly establishments steadily northwards, moving through Old Town and Lincoln Park along Clark Street and on to Boystown.

Boystown presently serves as the best-known Chicago gayborhood and as a center of its LGBTQ culture. In recent years, the area has been criticized for focusing on "affluent white gay men," rather than the broader LGBTQ community. Gentrification has pushed many LGBTQ people to reside ever further north into Uptown, Edgewater and Rogers Park.

In 1889, social reformer and activist Jane Addams opened Chicago's first settlement house, the Chicago Hull House. The purpose of it was to offer social reform for the community during the Gilded Age when many immigrants required help. Jane Addams had at least two same sex relationships over a long period of time. One of them was with Mary Rozet Smith, a Chicago born philanthropist.

During the 1920s and 1930s, Chicago, like other major urban centers, experienced what was called the Pansy Craze, when LBGTQ visibility greatly opened up. Gay cabarets were established and nightclubs had a steady demand. By the 1930s there were at least 35 pansy parlors. These clubs were so busy that some of them, like "Diamond Lil's" had to turn people away.

In 1924, the first American gay rights organization, the Society for Human Rights, was established by German immigrant and Chicago resident Henry Gerber. Gerber was inspired by similar institutions back in Germany and wanted to recreate one in Chicago. Its purpose was to defend the rights of people who have disabilities or were abused. On December 10, 1924, the state of Illinois officially recognized the society. Although it was shut down not long after, it made an impact, as gays and lesbians were seen to be more open near the Magnificent Mile area.

In the second half of the 20th century, more gay communities were established, centered around Clark Street. These neighborhoods would later develop into Boystown (Northalsted) and Andersonville. On July 28, 1961, Illinois became the first state to abolish sodomy laws as part of a package to revise old criminal laws. Along with this rise in LGBT population came increasingly frequent police raids which led to arrests for actions such as cross dressing. Groups like the Mattachine Society attempted to meet with the police and negotiate the arrests, but to no avail.

In 1969, the Baton Show Lounge was founded in River North. In 1970, the Bijou Theater was opened in Chicago's Old Town neighborhood.