Between 1892 and 1940, streetcars operated in Hammond and East Chicago. And between 1896 and 1940, streetcars operated through into Chicago's south side. Local buses continued to operate in Hammond and East Chicago until 1971. And between 1941 and the late 1980's, buses operated all the way into downtown Chicago. And after a brief period of no transit service, modest new bus systems were created in Hammond and East Chicago. The East Chicago service is free, and began operating in 1974. And in 1976, the Hammond Transit System began operation.
In 2010, the Hammond Transit System was taken over by the new Regional Bus Authority. In 2012, the Regional Bus Authority ran out of money and ceased operations. Hammond is now possibly the largest city in the country with a rich transit history, but now without local transit service.
Official Web site of East Chicago Transit.
Some historic information is from Bulletin No. 8 of the Electric Railway Historical Society.
Chicago Transit & Railfan Web Site