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The name, first recorded as "Pirlee" in 1200, means 'Peartree wood or clearing'.

Purley grew rapidly in the 1920s and 1930s, providing spacious homes in a green environment. Northeast Purley stretches into the chalk hill spurs of the North Downs.

One road, Promenade de Verdun, created by William Webb, has a distinction all of its own. It is 600 yards (550 m) long and has on one side Lombardy poplars planted in soil mixed with English and French earth specifically shipped over to the UK, a plaque at one end explains that the French ministry of Interior donated the soil from Armentières, as a memorial to the alliance of World War One and the soldiers who died.[citation needed] At the other end of the road stands an obelisk carved from a single piece of stone with the inscription "Aux soldats de France morts glorieusement pendant la Grande Guerre". Notably, the town was home to Joachim von Ribbentrop when he was ambassador before WWII.

The 32nd Surrey Battalion of the Home Guard was known as the Factory Battalion, and had the specific task of guarding the Purley Way factories: its units were mainly based on staff from the individual firms. The factories adjoining Croydon Airport took the worst of the air raid of 15 August 1940: the British NSF factory was almost entirely destroyed, and the Bourjois factory gutted, with a total of over sixty civilian deaths.

A comprehensive history of Purley and its growth around Caterham Junction (now Purley Station) with the coming of the railways some 150 years ago is found in the Bourne Society's 'Purley Village History' and in its Local History Records publications.

The Webb Estate made headlines in a 2002 survey, which found that it had over the years attracted the highest-earning residents in the UK. In the same year Purley topped Britain's rich list becoming the most affluent suburb and consistently features among the most affluent suburbs in Britain owing to its exclusive gated estates, large houses and greenery yet only less than 30 minutes from central London thus attracting wealthy city workers.

On television the town became known in the sitcom, Terry and June where Terry and June Medford (Terry Scott and June Whitfield).