The city was founded by Henry Flagler as a community to house the servants working in the two grand hotels on the neighboring island of Palm Beach, across Lake Worth. The original spelling was "Westpalmbeach", but it was feared that the 13-letter word would be a bad omen for the new community. On November 5, 1894, 78 people met at the "Calaboose" (the first jail and police station located at Clematis St. and Poinsettia, now Dixie Hwy.) and passed the motion to incorporate the Town of West Palm Beach in what was then Dade County (now Miami-Dade County). This made West Palm Beach the oldest incorporated municipality in the county and in South Florida. The town council quickly addressed the building codes and the tents and shanties were replaced by brick, brick veneer, and stone buildings. The city grew rapidly in the 1920s as part of the Florida land boom. Many of the city's landmark structures and old neighborhoods were built during this period.
In the 1960s, Palm Beach County's first enclosed shopping mall, the Palm Beach Mall, and an indoor arena were completed. They led to a short revival for the city, but crime continued to be a serious problem and by the early 1990s there were not many people living or working in downtown. Since the 1990s, developments such as CityPlace and renovation of 1920s architecture on Clematis Street have brought people back to downtown for the entertainment and shopping district.