Diller was platted in 1880 when the railroad reached the site and was named for Samuel Diller, an early area settler. It grew rapidly at first — from 126 residents in 1890 to a peak of 506 by 1910 — before the long decline typical of small Nebraska towns. Its most distinctive landmark, the Anna C. Diller Opera House, was built in 1912 as a gift from Anna C. Diller, widow of one of the town's co-founders; the three-story building was added to the National Register of Historic Places in 1988.

Diller is an incorporated village with a 2020 Census population of 248, roughly stable in more recent estimates (~266). Its ZIP code is 68342. Beyond the Opera House, Diller has two more National Register listings — the Colman House and the former People's State Bank, now home to the Diller Historical Society and Museum. The local economy is small-scale and agricultural, consistent with the surrounding county.