[4] That most of the village is water is due to the fact that most of Upper Peoria Lake lies within its boundaries;[5] this can be seen on official state maps.

The area was developed by white settlers in 1898, under the name Prospect Heights Land Company.

[10] The Prospect Heights Hotel hosted a Hungarian orchestra that played every night as the house band.

[12] The village is perhaps most noteworthy for its Grand View Drive, a residential street on top of the bluff overlooking the Illinois River with many elegant homes and a country club.

The road also has several panoramic look-outs of the river and beyond into Tazewell and Woodford counties as well as a park with a children's playground, picnic area, and baseball diamond.

Teddy Roosevelt purportedly called the street the "World's Most Beautiful Drive" when he visited the Peoria area in October 1910; WMBD, a local radio and TV station, gets its call letters from Roosevelt's expression.

[14] One can ascend the tower in an elevator and survey a sizable portion of Peoria, Tazewell, and Woodford counties from three observational decks.

Tower Park is a centerpiece of the community which underwent sweeping and controversial renovations in 2002, costing the Village nearly $800,000.

The nearby downtown business area includes upscale restaurants and shops.

In addition to this water tower there is another modern tower on Toledo Avenue colored white with the Peoria Heights logo; it was formerly painted a distinctive Red, White, and Blue (the school district colors).

A bronze sculpture of Lincoln's head by Gutzon Borglum is near the Village Hall within Tower Park.

[18] The Duryea Motor Wagon Company once had a production facility nearby (the reason for the aforementioned visit by Teddy Roosevelt).

[11] The closing of the Pabst brewery in 1982 had a severe impact on the local economy and population, from which the community has never completely recovered.

[15] The Peoria City mass transit company, CityLink, offers a History Trolley, which starts its tour in the Prospect Commercial Sector.

The Village Board formulates policy and enacts local laws, usually in the form of resolutions and ordinances.