In 1919, when the Indiana State Highway Commission was (re)created, a method of signing the new state highway system had to be created. Marking of highways at this point had been done by painting markers on to utility poles. Because of this, the Auto Trails created a rainbow of colors and simple markers to make a road easy to follow. Unless you came to the junction of multiple highways. Then it got a little dicey.
Indiana decided that, in 1917, the new Market road system would be marked pretty much the same way. The difference is that the highways would be numbered, and the markers would be in the shape of the state, with the words “STATE ROAD” included with the number. These signs would be painted onto the same utility poles containing the markers of the roads that the new state roads were replacing. Almost all state roads created through 1930 were placed along the routes of the earlier Auto Trails. This made for a very confusing driving situation.
With the Great Renumbering of 1926, a new system of signage was created. At first, the words “STATE ROAD” were removed from the new signage for Indiana state roads. The 1926 version of this sign included the shore line of Lake Michigan as part of the Indiana outline. (It should be noted that looking at a map of the state of Indiana, there is a common belief that the state line follows the shore of Lake Michigan. That is not entirely accurate. The state line is a straight line concurrent with the lines between Illinois and Indiana, and Indiana and Michigan. The northern state lines are actually square.)
It was in 1926 that the state also decided to stop painting the route numbers onto utility poles. I would assume that this was two fold. First, there were so many highway markings that the poles were getting more confusing than ever. Second, the basic complexity of the new state road signs, and especially the new US highway sign, which included a shield, the word “Indiana,” the letters “US,” and a number. The new route markers would be put on flat steel signs, with the legend embossed (pressed) into the steel plate.
By 1930, the markers, at least for state highways, would change again. This time, the outline of the state would include a square northern border. I imagine this was due to the fact that embossing a straight line is a bit easier than trying to emboss the shore line of Lake Michigan. The use of directional arrows would, mostly, not be put in place for almost two decades. The only exception would would the so-called “night signs,” which would be put in more dangerous driving situations.
The US highway marker wouldn’t change. They still didn’t use directional arrows, instead using smaller US shield shaped signs with the letters “L” and “R” in them for turning directions. These, unlike those that would come later, were cutout signs, meaning the shape of the sign matched that of the shield. Later, the shield would be embossed (then painted, and later [currently] printed and/or sticker cut) into a square sign with a black background.
The phaseout of the state shaped route markers would start in the late 1940s, with the new state road sign being square with the would “INDIANA” at the top. This is the current design, although, just like as was mentioned with the US markers above, the signs went from embossed, to painted to the current sticker cut or printing. The colors of the signs has never changed in over 100 years, still being black on white for the state and US highways.
Postscript. One of the earliest entries here on Indiana Transportation History made the point that US highways are actually state roads with a number that crosses a state line. That can be read here. From the same source that I “liberated” the above images comes the following description, shown in the image below.