History of Alabaster, AL The community that was to become Alabaster was created in the early 1920s as the site of employee housing for the Alabaster Lime Company; the community came to be known as Alabaster after both the business and the mineral, which is found in association with limestone. Its location along Highway 31, the main road at that time between Birmingham and Montgomery, aided in the area's development. By 1933, the community had grown enough to warrant having its own water department, the Alabaster Water Works Company, although that entity was defunct by 1939. The Alabaster post office opened in 1951 and the first bank in 1952. After a failed attempt in 1952, Alabaster was incorporated as a city on April 25, 1953, and a mayor and city council were elected soon after; at that time, the town listed a population of 427. In 1955, the Alabaster Water and Gas Board incorporated. Shelby Memorial Hospital, the first hospital in the county, opened in Alabaster in 1959. On April 27, 1971, the adjacent city of Siluria voted to merge with Alabaster.