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Flatbush was originally chartered as the Dutch Nieuw Nederland colony town of Midwout (or Midwoud or Medwoud) — from the Dutch words, med, "middle" and woud, "wood" — in 1651. Both names were used in the Dutch era, and Midwood was an alternative name for Flatbush into the early 20th century. In a reversal, Midwood, now the area immediately south of Brooklyn College, is often alternatively called "Flatbush," especially among Orthodox Jews. Midwood's residents predominately feature a mix of the latter and Irish Americans.

Flatbush and the five other towns of what was to become Kings County, were surrendered to the English in 1664. The town was the county seat for Kings County and was a center of life for what is now called Brooklyn. The compact center of the village of Flatbush was at the intersection of what are now Flatbush and Church avenues, where we still find an old Dutch Reformed Church and Erasmus Hall, the oldest high school in New York City.

Flatbush played a key role in the American Revolution. Flatbush was where significant skirmishes and battles of the Battle of Long Island took place. As Kings County was settled largely by the Dutch, and as the Dutch were prominent in the slave trade, the area was somewhat sympathetic to the British side of the American Revolutionary War at the beginning of the conflict. Kings County at the time had the highest concentration of slaves north of the Mason–Dixon line – according to the first federal census in 1790, one-third of the total population for the county were slaves. When a Loyalist Governor of Virginia supported freedom for slaves who supported and fought on the British side, landowners in Brooklyn were concerned that a full conflict between the Colonies and the British would result in loss of their critical source of labor. Loyalist residents of Flatbush included David Mathews, Mayor of New York City, who lived at what is now the intersection of Flatbush and Parkside avenues. Flatbush residents maintained their loyalist sympathies: the King's Arms, for example, appeared in the town's inn for a half-century after the conclusion of the conflict.

Historian Craig Steven Wilder calculated that between 70 and 80 percent of all Flatbush families in 1800 had an enslaved person. Johannes Lott, the original owner of the Hendrick I. Lott House, was one of the largest Kings County slaveowners with sixteen enslaved people in his household. For several decades after the Revolutionary War, New York merchants and farmers continued to engage in the slave trade. The Gradual Emancipation Law of 1799 emancipated people of African descent born after July 4, 1799. Women born before that date remained enslaved until the age of 25 and men to the age of 28. Men and women escaping enslavement often went to Manhattan, where they could live within the community of free blacks.

The influence of Dutch merchant and farming families remained strong in the area until after consolidation into the City of Greater New York in 1898, after which the development of Flatbush as a suburb, and then an integral part of the larger city, proceeded apace.

Before it was incorporated into the City of Brooklyn in 1894, Flatbush described both the Town of Flatbush, incorporating a large swath of central Kings County extending east to the Queens County border, and the Village of Flatbush, formerly the heart of the current community. Many of the remaining early Dutch structures are in the Flatlands and Marine Park neighborhoods.

Flatbush remained relatively distant from the City of Brooklyn's denser "Gold Coast" districts (such as Brooklyn Heights, Park Slope and Fort Greene-Clinton Hill, then known collectively as The Hill) following the consolidation of New York City in 1898, but the completion of direct New York City Subway routes to Midtown Manhattan via the BMT Brighton Line and IRT Nostrand Avenue Line in 1920 connected it to surrounding areas in an unprecedented way.^{[failed verification]}

As six-story Art Deco apartment houses and more affordable four-story walk-up buildings were developed on Ocean Avenue and throughout its periphery, Flatbush nurtured a socioeconomically diverse population of Irish Americans, Italian Americans and American Jews; according to anthropologist Ansley Hamid, occupants ranged from "merchants professionals" to "skilled manual laborers." Although the Victorian Flatbush neighborhood associations endured and grew to encompass succeeding waves of new residents, urbanization and the increasing prevalence of automobiles compelled the remaining vestiges of the neighborhood's "Anglo-Dutch elite" to " in droves for the upscale suburbs of Westchester, Long Island and New Jersey" by the late 1920s.

A significant portion of Flatbush residents closely followed the Brooklyn Dodgers, which at the time were not only the team of Brooklyn but also of Flatbush in particular. Dodgers centerfielder Duke Snider was known as "the Duke of Flatbush". By 1958, however, the Dodgers left Brooklyn, and Ebbets Field eventually was torn down. Due to shifting neighborhood boundaries, Ebbets Field would today be considered to be in neighboring Crown Heights, as the ballpark was located just north of Empire Boulevard.

During the 1970s and early 1980s, Flatbush experienced a shift in demographics due to white flight as it transitioned from a white ethnic enclave to a mostly Caribbean-American community; in an ethnographic interview with Hamid, Trinidadian and Tobagonian American drug supplier and longtime resident "Patron" asserted that the demographic shift accelerated in 1974: "The whites started moving to the outskirts, further across Nostrand Avenue, or towards Sheepshead Bay. A lot moved out to Long Island. And blacks [West Indians] started moving in from Crown Heights, where buildings were being abandoned. A lot of West Indians bought up property, and then in the late 1970s, they too would start moving to Long Island, or to the nicer houses going towards Coney Island Avenue."^:129 By now a working class milieu (according to "Patron," large apartment buildings gradually shed doormen, porters and other conveniences following the 1975 New York City fiscal crisis),^:129 a handful of affluent areas remained. Prospect Park South continued to attract a sizable number of more affluent homeowners, while doctors still resided and practiced on a stretch of Parkside Avenue immediately adjacent to Prospect Park. By the mid-1980s, however, the neighborhood had numerous abandoned or semi-abandoned buildings, many of which had fallen into a state of disrepair. While crime generally had long been prevalent in the community, it worsened significantly during the 1970s, '80s and '90s. A number of stores on Flatbush and Church Avenues fell victim to looting during the 1977 blackout, and a subsequent drug epidemic ravaged Flatbush during the 1980s and early 1990s. In February 2016, Flatbush was one of four neighborhoods featured in an article in The New York Times about "New York’s Next Hot Neighborhoods". After the Vision Zero initiative was implemented across the city, WNYC found the NYPD targeting this neighborhood 36 percent more than other whiter neighborhoods like Williamsburg and Greenpoint.

Based on data from the 2010 United States Census, the population of Flatbush was 105,804, a decrease of 5,071 (4.6%) from the 110,875 counted in 2000. Covering an area of 1,038.56 acres (420.29 ha), the neighborhood had a population density of 101.9 inhabitants per acre (65,200/sq mi; 25,200/km²).

The racial makeup of the neighborhood was 19.9% (21,030) White, 48.6% (51,470) African American, 0.3% (281) Native American, 9.2% (9,712) Asian, 0.0% (26) Pacific Islander, 0.5% (575) from other races, and 1.9% (2,051) from two or more races. Hispanic or Latino of any race were 19.5% (20,659) of the population.

The entirety of Community Board 14, which comprises Flatbush and Midwood, had 165,543 inhabitants as of NYC Health's 2018 Community Health Profile, with an average life expectancy of 82.4 years.^{:2, 20} This is slightly higher than the median life expectancy of 81.2 for all New York City neighborhoods.^{:53 (PDF p. 84)} Most inhabitants are middle-aged adults and youth: 25% are between the ages of 0–17, 29% between 25–44, and 24% between 45–64. The ratio of college-aged and elderly residents was lower, at 9% and 13% respectively.

As of 2016, the median household income in Community Board 14 was $56,599. In 2018, an estimated 22% of Flatbush and Midwood residents lived in poverty, compared to 21% in all of Brooklyn and 20% in all of New York City. One in eleven residents (9%) were unemployed, compared to 9% in the rest of both Brooklyn and New York City. Rent burden, or the percentage of residents who have difficulty paying their rent, is 57% in Flatbush and Midwood, higher than the citywide and boroughwide rates of 52% and 51% respectively.

While Flatbush is predominantly African American and West Indian, there are sizable numbers of Caucasians, Latinos and Indian Americans living within its borders. A majority of residents are working class, but there also are middle-class and wealthier residents who call Flatbush home. The primary commercial strips are Flatbush, Church, and Coney Island Avenues. One can find Caribbean food, Soul food, Chinese, Mexican and South Asian restaurants. Most of the businesses are small, with some larger businesses also present. A large part of the culture in Flatbush is the use of "dollar vans". These "vans" are actually minibuses that provide a cheaper alternative to riding the MTA. Residents pay $2 to travel along Flatbush Avenue from Kings Plaza to Tillary St. While many dollar vans operate illegally, they are still a major part of transportion in Flatbush.

Flatbush housing varies in character. It generally features apartment buildings, though some rowhouses also are present. Older, Victorian-style housing can be found in Prospect Park South, and brownstones are in Prospect Lefferts Gardens.

The Flatbush community has been receiving an influx of immigrants from the Caribbean, mostly from Guyana, Haiti, Trinidad and Tobago, Jamaica, Grenada, Barbados, Saint Lucia, Saint Vincent and the Grenadines, Dominica, Antigua and Barbuda, Saint Kitts and Nevis and Belize,^{[citation needed]} since the 1980s, as well as immigrants from South Asia, primarily India, Pakistan and Bangladesh and African countries like Ghana, Zimbabwe, Nigeria, and Kenya. Haitians are the largest ethnic group in Flatbush. Prior to the arrival of these groups, the Flatbush community had already been diverse, with many Italian-Americans, Irish-Americans, African-Americans and Jewish-Americans.