The street was created by the Commissioners' Plan of 1811 as one of 16 north-south streets specified as 100 feet (30 m) in width, including 12 numbered avenues and four designated by letter located east of First Avenue.

[2] The city reasoned that the lettered avenues were "incapable of use as thoroughfares to and from the City" and could not "be considered as avenues in the proper Sense of the term.

It was called Avenue B under the original Commissioners' Plan of 1811, but is no longer given that designation.

Carl Schurz Park, the location of Gracie Mansion, is adjacent to the avenue at this point.

In 1928, the New York City Board of Estimate ruled that development below East 84th Street was restricted to residential use.