In 1877, again in response to a public petition, Queen Victoria issued a second Royal Charter to grant city status to the borough and Cathedral status to the former Abbey church. By now, the Abbey had somewhat fallen into disrepair and after initial work by Gilbert Scott, was rebuilt by Lord Grimthorpe who financed a £130,000 renovation of the then dilapidated cathedral, transforming the west front of the building in Neo-Gothic style. Much of the medieval and Victorian history of the city can be seen at the Museum of St Albans, which focuses on the social history of the area, which was founded and built specifically as the Hertfordshire County Museum in 1898.

During the inter-war years, St Albans, in common with much of the surrounding area, became a centre for emerging high-technology industries, most notably aerospace, particularly with Hatfield becoming the headquarters for de Havilland. While all the aerospace industries have now left the area, London Colney now hosts the de Havilland Aircraft Heritage Centre and Mosquito Museum.

The City was expanded significantly after World War II, as government policy promoted the creation of New Towns and the expansion of existing towns. Substantial amounts of local authority housing were built at Cottonmill (to the south), Mile House (to the south-east) and New Greens (to the north). The Marshalswick area to the north-east was also expanded, completing a pre-war programme. The city today continues to expand as a commuter town.