The time in Indiana is ...

Time in the 19th Century
Prior to standardization each community would set its own time. For example:
Chicago Gary South Bend Indianapolis Fort Wayne Toledo
11:59:48
12:00:36
12:04:51
12:05:11
12:09:15
12:16:05
Times shown are for illustration only and do not account for the +/- 16 minute drift in solar time.
Communities using "high noon" as a standard varied not only due to their location (solar noon reaching eastern communities before western communities) but due to the drift in when solar noon occurs. (Solar noon can be as much as 32 minutes different between the latest "high noon" in February and the earliest "high noon" in November.)

On November 18, 1883, the railroads in the U.S. put in to effect time zones that would allow trains to run on a standardized time. The railroads set four zones across the US. Standard time was not codified in Federal Law until 1918. Communities continued to set their own time - usually based on railroad time - with many observing (what we would now call) Daylight Saving Time at varying times throughout the year.

For 35 years "railroad time" was the primary standard. As more accurate clocks and watches were developed and more people traveled having a consistent time reference became more important. Communications and commerce improved and more communities adjusted their local time to be on the same time as their trading partners to the east.
Time in the 20th Century
In 1918, when the Federal government first officially established time zones, all of Indiana was in the Central Time Zone. The zone was based on "railroad time". The first time zone boundaries drawn by the Interstate Commerce Commission became effective January 1, 1919, at 2 am.

Under the 1918 Federal Law Daylight Saving Time was observed across the entire nation. That portion of the law was repealed in 1919. During World War II Daylight Saving Time (called "War Time") was in force continuously from February 9, 1942 to September 30, 1945.

Actual observance of the time zones varied nationwide with Indiana becoming a patchwork quilt of central vs eastern and standard vs advanced time.
March 1918
 
In 1949 the Indiana General Assembly outlawed Daylight Saving Time. The law proved unenforceable and communities continued to follow their own time observances (including Daylight Saving Time in winter months).

In 1957 Indiana made Central Time the official time zone of Indiana. Communities are allowed to observe Daylight Saving Time during summer months.

In 1961 the Indiana legistature repealed the 1957 law, deferring to the Interstate Commerce Commission to set the boundary.
In 1961, the Interstate Commerce Commission (in response to petitions from Indianapolis and south east Indiana) moved the eastern half of Indiana to the Eastern Time Zone but denied requests to move more of the state.

The light green counties were moved to Eastern Time.
The medium red counties were proposed to be moved but their move was denied.

The Uniform Time Act of 1966 officially restored Daylight Saving Time starting on the last Sunday of April and ending on the last Sunday of October. The law also permitted Indiana (and other states) to opt out of observing Daylight Saving Time. The EST portion of Indiana did not officially observe EDT. (Residents of counties near Louisville KY and Cincinnatti OH unofficially observed "fast time".)
July 1961
In 1967, the US DOT (at the request of the Governor of Indiana) proposed to restore the entire State to the Central Time Zone. However, in 1968, DOT modified the proposal and proposed instead that the entire State be in Eastern Time with the exception of six counties in the northwest and seven in the southwest which would remain in Central Time. The modified proposal was supported by the commenters, with one exception. Commenters did not support moving one of the southwest counties to the Central Time Zone. Effective April 27, 1969, time zone boundaries were established to place all of Indiana in the Eastern Time Zone with the exception of six counties in the northwest and six counties in the southwest.

The light green counties were moved to Eastern Time.
(Dubois County was initially proposed to remain in Central Time.)
April 1969
 
Due to the length of time taken in the 1967-1969 process, Indiana and the DOT were left in a complicated position. While the Department of Transportation had effectively decided to redraw the boundary to place 13 counties in Central Time and the remainder in Eastern Time the final ruling had not been made. Faced with the beginning of the federally mandated Daylight Saving Time in April of 1968, DOT announced that it would not enforce the law in Indiana until their proceedings were completed. Time Life Broadcasting (then licensee of Channel 6 Indianapolis) and other Indiana broadcasters (representing channels 4, 8 and 13 in Indianapolis and channel 15 in Fort Wayne) sued to force the DOT enforce DST.

Part of the complication was the requirement that the entire state opt out. While the time zone issue was resolved in 1969 with the redrawing of the boundary, the DST issue was not resolved until 1972.
(Indiana Acts 1972, P.L.7, SEC.1. and US Public Law 92-267 - March 30, 1972)
In 1977 the Pike County Commissioners petitioned DOT to be moved to the Eastern Time Zone. After proposing the change and receiving comments, DOT approved the request.

The light green county is Pike County.

In 1985 the Indiana General Assembly requested that DOT move the 5 remaining southwest counties to the Eastern Time Zone but DOT denied the request, finding that the move would not serve the "convenience of commerce."
October 1977
In 1986 the Jasper County Commissioners and the Starke County Commissioners made separate requests to move each county to the Eastern Time Zone. DOT denied their requests, finding that changing the boundaries would not serve the "convenience of commerce."

In July of 1986 the U.S. Congress passed a law that changed the annual start date of Daylight Saving Time from the third Sunday in April to the first Sunday in April. The effective date of the change was set for 1987.

In 1991 based on another request from the Starke County Commissioners, DOT changed the time zone boundary to move Starke County into the Eastern Time Zone.

The light green county is Starke County. The red X markes Jasper County.
October 1991
Time in the 21st Century
In 2005, the Indiana General Assembly adopted legislation (Indiana Senate Enrolled Act 127) providing that the entire State of Indiana would observe Daylight Saving Time beginning in 2006. The legislation also asked the DOT to hold hearings to determine the time zone for most of the counties within Indiana. Per the legislation, counties in Central Time were to remain in Central Time and five counties near Louisville Kentucky and Cincinnati Ohio were to remain on Eastern Time.

After much debate and several hearings the DOT determined on January 20, 2006, that eight counties should move to Central Time. Pulaski County immediately objected (expecting that they would move to Central Time only if adjacent counties were moved) and initially stated that they would refuse to follow Central Time. Days before the change was scheduled to take effect Pulaski County reluctantly agreed to follow Central Time.

Effective 2 a.m. EST Sunday, April 2, 2006, (which was the changeover date from standard time to daylight saving time and the first DST officially observed in most of Indiana since 1919) two counties in northwest Indiana and six counties in southwest Indiana officially moved to Central Time. (Residents of the eight counties did not adjust their clocks while the rest of the state moved their clocks forward for daylight saving time.)
April 2006

DAYLIGHT SAVING TIME
OBSERVED STATEWIDE
In August of 2005 the U.S. Congress passed a law that changed the effective date of Daylight Saving Time from the first Sunday in April through the last Sunday in October to a longer period extending between the second Sunday in March to the first Sunday in November. The effective date of the change was set for 2007.

Effective 2 a.m. EST Sunday, March 11, 2007, (which was the changeover date from standard time to daylight saving time) Pulaski county in northwest Indiana officially moved back to Eastern Time. (In making this move, residents of the county moved their clocks forward two hours from CST to EDT.)
March 2007
Effective 2 a.m. EST Sunday, November 4, 2007, (which was the changeover date from daylight saving time to standard time) five counties in southwest Indiana officially moved back to Eastern Time. (Residents of the five counties did not change their clocks as the rest of the state moved their clocks back to standard time.)

And that brings us to today ... all of Indiana in distinct time zones that match the remainder of the eastern and central United States. For more than a decade business partners across the US and the world have known what time it is in Indiana.

Does that need to change? Read On ...
November 2007

History: A detailed look at changes to the boundary between Eastern and Central Time