The city was for ranch owner Elias Anderson who granted the Oregon and California Railroad trackage rights and land for a station.
As of the census of 2000, there were 9,022 people, 3,372 households, and 2,319 families residing in the city. The population density was 1,412.0 people per square mile (545.1/km²). There were 3,579 housing units at an average density of 560.2/sq mi (216.3/km²). The racial makeup of the city was 86.51% White, 0.62% African American, 4.13% Native American, 1.77% Asian, 0.12% Pacific Islander, 2.33% from other races, and 4.51% from two or more races. Hispanic or Latino of any race were 7.30% of the population.
There were 3,372 households out of which 39.3% had children under the age of 18 living with them, 42.6% were married couples living together, 20.2% had a female householder with no husband present, and 31.2% were non-families. 26.5% of all households were made up of individuals and 12.0% had someone living alone who was 65 years of age or older. The average household size was 2.64 and the average family size was 3.14.
In the city the population was spread out with 31.6% under the age of 18, 9.2% from 18 to 24, 27.1% from 25 to 44, 18.3% from 45 to 64, and 13.9% who were 65 years of age or older. The median age was 32 years. For every 100 females there were 87.4 males. For every 100 females age 18 and over, there were 79.6 males.
The median income for a household in the city was $24,558, and the median income for a family was $29,259. Males had a median income of $28,074 versus $20,745 for females. The per capita income for the city was $11,744. About 22.2% of families and 28.3% of the population were below the poverty line, including 43.3% of those under age 18 and 9.5% of those age 65 or over.
According to a 2006 estimate, the population is 10,677. The report by the California Department of Finance lists the annual percentage change population estimate at 1.4%.
In 2007, the population actually dropped from 10,677 to 10,580, a breather from its super fast growth spurt.
In areas north of Anderson, 4,036 live in unincorporated urban areas along Highway 273. Another 8,342 live in rural areas, including at least 3,500 people in the communities of Olinda and Happy Valley, which is west of Anderson and southwest of Redding. A total of 21,400 people live in the entire Anderson area, including Olinda, Happy Valley, and some areas south of Churn Creek Bottom.