Since God knows everything from eternity past to eternity future and nothing catches God by surprise, knowing that if He created Lucifer that he would rebel and sin. So, why did God create Lucifer?

This is one of the deepest questions in theology. Faithful Christians have answered it in different ways, but most agree on several foundational truths.
1. God did know Lucifer would rebel.
The Bible teaches that God knows the end from the beginning.
Isaiah 46:9-10 – "I am God... Declaring the end from the beginning, and from ancient times things that are not yet done."
Psalm 147:5 – "His understanding is infinite."
Nothing about Lucifer's rebellion surprised God.
2. God created Lucifer good, not evil.
Lucifer was created as a magnificent, holy angel.
Ezekiel 28:12-15 (often understood as having a dual application to the king of Tyre and to Satan) says:
"You were perfect in your ways from the day you were created, till iniquity was found in you."
Likewise, Genesis 1:31 says that everything God made was "very good."
God did not create evil in Lucifer. He created a being capable of loving, worshiping, and serving Him freely.
3. Love requires genuine choice.
Many theologians argue that true love cannot be forced.
If angels and humans were incapable of choosing otherwise, they would be programmed creatures rather than willing worshipers.
Lucifer chose pride.
Isaiah 14:13-14
"I will ascend... I will be like the Most High."
His sin originated in his own heart.
4. God permitted evil to accomplish a greater purpose.
This is perhaps the hardest truth.
God hates evil, yet He sovereignly allows it because He will ultimately display His glory through His victory over it.
Through redemption we see God's:
holiness,
justice,
mercy,
grace,
patience,
love,
wrath against sin,
and triumph over evil.
Without the Fall there would be no cross, and without the cross we would never fully know the depths of God's sacrificial love.
Romans 5:8 – "God demonstrates His own love toward us, in that while we were still sinners, Christ died for us."
Romans 11:32-36 concludes God's redemptive plan with praise:
"For of Him and through Him and to Him are all things: to whom be glory forever."
5. God's ultimate purpose is His glory.
Scripture repeatedly teaches that all things exist for God's glory.
Romans 9:22-23 shows God displaying both His justice and mercy.
Ephesians 1:5-12 repeatedly says salvation is "to the praise of His glory."
Even Satan's rebellion cannot thwart God's purposes. It ultimately magnifies God's wisdom and power because Satan's defeat is certain.
Genesis 3:15 foretells Satan's defeat.
Colossians 2:15 says Christ "disarmed principalities and powers."
Revelation 20:10 records Satan's final judgment.
A balanced theological conclusion
God knew Lucifer would sin before creation. Yet God created him as a good, holy being with genuine moral responsibility. Lucifer freely chose pride and rebellion. God permitted that rebellion—not because He delights in evil, but because through history He would reveal the fullness of His character, culminating in the death and resurrection of Jesus Christ. In the end, God's justice, mercy, love, and glory will be displayed more completely than they would have been had evil never entered creation.
As Charles Spurgeon once expressed the idea: God never authors sin, but He is so sovereign that even the rebellion of His creatures cannot frustrate His eternal purposes. What Satan intends for evil, God ultimately overrules for His glory and the good of His redeemed people (see Genesis 50:20 and Romans 8:28).