French fur traders first visited in the late 1700s, and Vermillion was founded in 1859 and incorporated in 1873. The name refers to the Lakota name: wa sa wak pa'la (red stream). Home to the University of South Dakota, Vermillion has a mixed academic and rural character: The University is a major academic institution for the state, boasting the state's only law and medical school, the state's only AACSB accredited business school, and several well-regarded academic departments. Major farm products include corn, soybeans, and alfalfa. The population was 9,765 at the 2000 census.
Vermillion is also home to the National Music Museum.
As of the census of 2000, there were 9,765 people, 3,647 households, and 1,801 families residing in the city. The population density was 2,549.3 people per square mile (984.4/km²). There were 3,967 housing units at an average density of 1,035.6/sq mi (399.9/km²). The racial makeup of the city was 90.95% White, 1.29% African American, 3.37% Native American, 2.46% Asian, 0.01% Pacific Islander, 0.37% from other races, and 1.56% from two or more races. 1.07% of the population were Hispanic or Latino of any race.
There were 3,647 households out of which 25.8% had children under the age of 18 living with them, 37.5% were married couples living together, 9.2% had a female householder with no husband present, and 50.6% were non-families. 34.1% of all households were made up of individuals and 7.8% had someone living alone who was 65 years of age or older. The average household size was 2.24 and the average family size was 2.90.
In the city the population was spread out with 17.5% under the age of 18, 36.2% from 18 to 24, 24.5% from 25 to 44, 13.4% from 45 to 64, and 8.4% who were 65 years of age or older. The median age was 24 years. For every 100 females there were 91.6 males. For every 100 females age 18 and over, there were 89.9 males.
The median income for a household in the city was $24,095, and the median income for a family was $40,109. Males had a median income of $28,180 versus $20,975 for females. The per capita income for the city was $13,909. 26.2% of the population and 16.2% of families were below the poverty line. Out of the total people living in poverty, 19.0% are under the age of 18 and 14.8% are 65 or older.
For the population 25 years and over, 90.7% have a high school education or higher; 45.4% have a bachelor's degree or higher; and 21.2% have a graduate or professional degree.
For ancestries, 36% claim German ancestry; 14.2% Norwegian; 13.4% Irish; 6.6% English; 5.5% Dutch; and 4% Swedish.