The electric street railway system was instituted in 1890. Capitalizing on a desire that had originated in the 1860's, the Ann Arbor Street Railway Company's first line connected the Michigan Central Railroad Depot, the downtown business district, the University campus, and the new fairgrounds at Burns Park. That same year another company built the first interurban system in the state, connecting Ypsilanti and Ann Arbor. The interurban began operations in 1891 and five years later merged with the Ann Arbor Street Railway. In 1898 this system combined with the larger Detroit, Ypsilanti and Ann Arbor Street Railway Company. Offering frequent trips at low prices, the interurban took much of the passenger traffic between Ann Arbor and Detroit away from the Michigan Central Railroad and allowed people in rural areas to come to Ann Arbor more frequently. Ann Arbor residents could now shop in Detroit and Ypsilanti or ride the car between Ann Arbor and Ypsilanti for a warm summer evening's entertainment.

Besides negotiating and amending franchises for public service corporations, the city council worked on a sanitary sewer system (begun in 1894), a storm sewer system (begun in 1898), street paving (begun in 1896), and the repair and replacement of sidewalks. Prior to the 1890's good natural drainage kept Ann Arbor's dirt streets passable in all but the wettest weather. The installation of water pipes and sewers, however, left the roads rutted and marred by potholes. As an experiment in 1896 the city macademized a portion of Huron Street in front of Fireman's Hall, Fourth Avenue between Ann and Catherine, and Detroit Street between Catherine and the depot. In 1898 five blocks of Main Street were paved with brick and in the following year a brick surface was put on the downtown blocks of Washington Street.

Burgeoning city services called for an increasingly sophisticated city government with an independence and expertise impossible to maintain under the old paternalistic system. Led by Mayor Samuel W. Beakes, council rewrote the city charter in 1889, making the council purely a legislative body. The mayor was given strong executive powers and a veto over council legislation. In addition he obtained the right to appoint, subject to council approval, all members of city boards, and other city officials including the treasurer, the chief of police, and the city attorney. These paid officials assumed administrative chores previously performed by the city council. A new City Building was constructed in 1893 and symbolized the change to a more public government.

Two important regulatory commissions were created under the new charter. The Board of Public Works brought all work on city streets under the direction of a city engineer. Previously the council had maintained separate street funds for each ward, administered by the appropriate alderman. Central planning and control of street maintenance soon proved more efficient and less expensive.

The Board of Fire Commissioners supervised the city's first professional fire fighting force. Prior to 1889, the city's protection against fires consisted only of several volunteer fire companies. Under this system anywhere from 75 to 150 people per year received the $5 salary for firemen (increased to $10 in 1886). The Board of Fire Commissioners converted the fire department to a professional force of about 6 full-time men and 5 men on call, and was able to raise wages to $40 per month for a first-year man.