In 1958, BHP announced the decision to build an integrated steelworks at their site in Whyalla. This decision was influenced by the State Government of Thomas Playford, which they were keen to see ore mined in South Australia and processed in the State as well. New workers flooded into town, and Whyalla continued to expand to the west to accommodate the rising population, which by 1961 had reached 14,076.
On 1 November that year, Whyalla was proclaimed a City and the next month the Town Commission moved into the new Civic Building on Darling Terrace.
The next 18 years saw exponential growth in the city. By 1962, BHP was employing 2,301 staff at the steelworks and 1,407 at the shipyards. The South Australian Institute of Technology (now the University of South Australia), Bennett Oval, Whyalla Bowl, Ambulance Centre, Foreshore Motel, Outdoor Swimming Pool and Darling Terrace Post Office were built during 1965. In May of that year, the Whyalla Steelworks were declared open by Premier Frank Walsh.
The first consignment of exported steel blooms left BHP for Spain in 1966, the company started harvesting salt and the construction of the coke ovens began. In anticipation of increased demand for water, a second pipeline from Morgan was being constructed. This time the pipe was laid under Spencer Gulf and water flowed through it for the first time in October. The census on 30 June revealed that the population had reached 22,126, an increase of 8,050 in the previous five years, To cope with this rise in population, the South Australian Housing Trust was building houses at a rate of 500 a year.
In 1967, the suburbs of Whyalla were officially named Whyalla, Whyalla Playford, Whyalla Norrie and Whyalla Stuart. The city continued to grow westward and the significant Westland Shopping Centre was built in the geographical centre of Whyalla near the Mount Laura Homestead Museum - originally the old homestead of Mount Laura Station.
The construction of the Whyalla Steelworks was finally completed in 1968, when the pellet plant and the coke ovens both began operation. Estimates of the population in that year show it continuing to soar, increasing by approximately 6,000 in the previous two years to 28,150. The workforce of BHP in 1970 had now reached 6,950. Preliminary planning by the Department of Lands was now allowing for a city to 100,000 people.
However, due to the ship-building slump in the 1970's, the Whyalla Shipyards closed down in 1978, at the same time as a worldwide downturn in the steel industry. The city, after a population peak of 33,000 in 1976, reeled from this shock and rapidly decreased its numbers.