The Woodlands was conceived after the oil industry investor George P. Mitchell attended a symposium by the Rouse Company subsidiary American City Corporation and developer of Columbia, Maryland on how to develop new towns using the HUD Title VII program. It was dedicated by George P. Mitchell in 1974 and managed by The Woodlands Corporation as an extension of Mitchell Energy & Development. Mitchell, an oil businessman, planned to establish a conference center, hotels, office parks, retail malls, schools, large distribution centers, and golf courses. Houses would range from moderately priced to expensive and large. Bill Schadewald of the Houston Business Journal said that Mitchell wanted the development to "entice city slickers looking for far-flung suburban quality of life". Schadewald said that local sources stated that the HUD New Town program, a federally funded program, had a "low survival rate" and questioned whether The Woodlands would succeed.

The Woodlands Corporation was acquired on July 31, 1997, by a partnership between Morgan Stanley and Crescent Real Estate Equities. In December 2003, Rouse Company acquired Crescent's interest, and Rouse was bought by General Growth Properties on November 12, 2004. In 2011, The Woodlands was sold to the Howard Hughes Development Corporation.

The land was previously occupied by the Grogan-Cochran Lumber Mill, hence Grogan's Mill and Cochran's Crossing neighborhoods, called "villages". The original planning utilized many of the planning concepts and design consultants employed in other well-regarded new communities of that era such as Columbia, Maryland, Irvine Ranch, California and Reston, Virginia. The original development plan included environmental design principles espoused by Ian McHarg, a distinguished landscape architect, teacher and author of the seminal work Design With Nature.

It continued to grow residentially and commercially as many companies were moving there. In addition to Chevron Phillips, Huntsman Corporation, Hewitt Associates, Lexicon Pharmaceuticals, Maersk, M&S Engineering and Woodforest National Bank have set up operations. The Town Center includes shopping and eating facilities as well as a waterway resembling the San Antonio River Walk.

On September 13, 2008, it sustained extensive damage from Hurricane Ike. Sustained winds of 85 mph (137 km/h) brought down thousands of trees, powerlines, and billboards in the area and severely damaged the Cynthia Woods Mitchell Pavilion. Ike was the first hurricane to directly affect the area since Hurricane Alicia in 1983.

The summer of 2011 brought an unprecedented drought throughout Texas, which caused thousands of trees to die and requiring they be taken down, a process that continued into 2012.

In 2011, Schadewald said "Now: Obviously, The Woodlands had quite a future. Somewhere between First Colony and The Woodlands, I realized why visionary real estate developers strike it rich more often than skeptical real estate reporters."

In 2012, the U.S. Census Bureau designated the area around The Woodlands and Conroe as a "large urbanized transit area", defined as having over 200,000 residents, making it eligible to receive federal transportation funds.

From 2004 to 2018, water taxis known as "Waterway Cruisers" traveled along The Woodlands Waterway. On November 13, 2018, after suffering damage from Hurricane Harvey the year before, the six Waterway Cruisers were removed from the waterway.

Mitchell's original plan was for The Woodlands to be annexed by the city of Houston. In the middle part of the 2000s, some residents feared such an annexation, as had happened to the Kingwood development almost a decade before. To counteract any possible move by the city, a movement began to create an independent city government.^{[citation needed]} However, the formation of an independent government would require authorization by the State of Texas and the City of Houston, as Houston held extraterritorial jurisdiction over the area.

In 2007, two state legislators representing The Woodlands, Sen. Tommy Williams and Rep. Robert Eissler, introduced two bills that were enacted in the 2007 Legislature – House Bill 4109 and Senate Bill 1012. HB 4109 called for a vote to allow expansion of an existing improvement district (now The Woodlands Township) and to allow The Woodlands to collect sales tax, while SB 1012 allowed for the creation of regional agreements between governments. The passage of these bills allows an opportunity for The Woodlands to incorporate itself until 2057. Since 2019, there has been formal discussion of The Woodlands to become an incorporated city. However, as a result of the ongoing COVID-19 pandemic, these plans have been put on hold. In 2020, residents of The Woodlands formed the TownshipFuture PAC.

At the 2010 U.S. census, there were 93,847 people living in The Woodlands. In 2018, its population was estimated at 116,278 per a survey by the Howard Hughes Corporation.

The racial makeup of The Woodlands in 2010 was 88.4% white (non-Hispanic and Hispanic or Latino), 2.4% Black or African American, 0.3% American Indian and Alaska Native, 4.9% Asian, 0.1% Native Hawaiian and Other Pacific Islander, 2.1% two or more races, 12.3% Hispanic or Latino, and 78.5% white alone, not Hispanic or Latino.

As of 2017 about 10% of the residents of The Woodlands were of Mexican origins; they numbered at over 10,000. In 2000, wealthy Mexicans began buying houses in The Woodlands for vacation purposes. Large numbers settled in The Woodlands from 2006 to 2014 as the Mexican Drug War occurred. By 2006 the numbers of middle and upper class Hispanics and Latinos, including Mexican nationals, increased. Some of the residents were assigned to Houston by their companies. Some of them moved to The Woodlands to escape increased crime and political tensions from the Mexican presidential election and find better schools for their children.

At the 2013–2014 school year, 22% of the students at Conroe Independent School District elementary and junior high schools in The Woodlands were Hispanic or Latin American. This was an increase from 10.5% in the 2005–2006 school year, and the percentages grew particularly in Glen Loch, Lamar, and Tough elementary schools. The 2013-2014 percentage in Conroe ISD schools in The Woodlands was below the overall Conroe ISD Hispanic average of 34.2%.

The Hispanic and Latin American community has Viva! The Woodlands Magazine, a Spanish language magazine that covers The Woodlands, as well as the Montgomery County Hispanic Chamber of Commerce. Many churches in The Woodlands area have some services in Spanish.

In 2000, there were 55,649 people, 19,881 households, and 15,546 families. The population density was 2,328.4 people per square mile (900.5/km²).There were 21,014 housing units at an average density of 897.7 per square mile (346.6/km²). The racial makeup was 92.36% White, 1.75% Black, 0.29% Native American, 2.80% Asian, 0.05% Pacific Islander, 1.43% from other races, and 1.32% from two or more races. Hispanic or Latino of any race were 28% of the population.

There were 19,881 households, out of which 47.1% had children under the age of 18 living with them, 69.2% were married couples living together, 7.2% had a female householder with no husband present, and 21.8% were non-families. 19.1% of all households were made up of individuals, and 7.3% had someone living alone who was 65 years of age or older. The average household size was 2.78 and the average family size was 3.21. At the 2000 U.S. census, 31.8% were under the age of 18, 5.0% from 18 to 24, 30.5% from 25 to 44, 25.1% from 45 to 64, and 7.6% were 65 years of age or older. The median age was 37 years. For every 100 females, there were 92.9 males; for every 100 females age 18 and over there were 88.5 males.

The median income for a household was $85,253, for a family $98,675. Males had a median income of $78,642 versus $38,505 for females. The per capita income was $37,724. About 3.0% of families and 4.2% of the population were below the poverty line, including 4.0% of those under age 18 and 10.6% of those age 65 or over. According to a 2007 estimate, the median income for a household had risen to $94,626, for a family to $113,243.

As of 2016, there were almost 50 centers of worship in The Woodlands, occupying a total of 330 acres (130 ha) of land. As of 2011, the community is majority Christian.

As of 2018, The Woodlands United Methodist Church had about 13,000 members in its congregation. It was established in 1978. Pastor Kerry Shook established Fellowship of The Woodlands Church, now known as Woodlands Church, in 1993. Its permanent church building opened on August 19, 2001. Church Project, which holds services in a former Kroger, had an average weekly attendance of 1,500 in 2014. As of 2018 Christ Church United Methodist has about 3,000 members. Circa 2012 Covenant United Methodist Church began its worship services at Timber Creek Elementary School, and by 2016 bought 5 acres (2.0 ha) of land near the entrance of Village of Creekside Park for a permanent 700-seat facility. On December 25, 2001, the Korean Community Church in The Woodlands, with Presbyterian Korean-language services and non-denominational English services, opened. It opened to serve ethnic Koreans in The Woodlands, Conroe, Huntsville, Kingwood, and Spring. Other Protestant or non-denominational Christian churches in The Woodlands include Lord of Life Lutheran Church, Trinity Episcopal Church, and Unity of The Woodlands.

Saints Simon and Jude Catholic Parish, the first Catholic church in The Woodlands, was established circa 1980, with its 400 parishioners initially meeting at Knox Junior High School before moving into its permanent building in 1981. As of 2013 it had 3,800 families in its congregation. St. Anthony of Padua, another Catholic church, had 3,020 families in its congregation in 2006, and 5,700 families in its congregation in 2013. It operates St. Anthony of Padua Catholic School.

There are two Jewish places of worship, traditional and reformed. Congregation Beth Shalom, established circa 1984 led by Rabbi Edwin C. Goldberg, has about 175 families, and is affiliated with Reform Judaism. Its affiliated organizations are the Association of Reformed Congregations and the Union of American Hebrew Congregations. Chabad of The Woodlands was established in 2011 by Rabbi Mendel and Leah Blecher. It is a branch of the worldwide Chabad Lubavitch movement, offering traditional-style services to contemporary Jewish families. Chabad of The Woodlands inaugurated and sponsors the annual Chanukah on Market Street celebration, and established the first Jewish preschool in the area.

In 2011, there were 350 Hindu families in The Woodlands. In a 15-year period ending in 2011, the Hindu population in the Woodlands increased by 300%, and Kate Shellnut of the Houston Chronicle stated that according to "Hindu leaders" every year the Hindu population in The Woodlands grows by 20 to 25 families. The Hindu Temple of The Woodlands, a Hindu temple serving the northern part of Greater Houston, was scheduled to open in 2010. Another Hindu temple, Char Dham Hindu Temple, was founded by Surya Sahoo.

Masjid al-Ansaar (Woodlands Islamic Center) of the Islamic Society of Greater Houston (ISGH) was created in 2009, and in 2019 it had 300 parishioners. It is in an unincorporated area outside of The Woodlands.