[5] Along with the neighboring coastal town of Lewes, Rehoboth Beach is one of the principal cities of Delaware's rapidly growing Cape Region.

As a popular, affluent vacation destination, especially for the communities of Washington, D.C., and Philadelphia, Rehoboth Beach has many summer homes, including one owned by 46th U.S. President Joe Biden.

During on-season, Rehoboth Beach's population expands to over 25,000 within the city limits and thousands more in the surrounding area in the summer.

[9] Pressure from English and Dutch settlers radiating outward from Cape Henlopen near Lewes, Delaware at the entrance to Delaware Bay forced the Lenape to migrate to upper New York state, eastern Canada, and eventually to the west in Indian Territory (later formed Oklahoma, Kansas, parts of Arkansas) while the Sikkonese and Assateagues were extirpated; the Nanticoke, however, still exist in the general area today.

The land later came under the control of the Duke of York, younger brother of King Charles II who also seized and occupied in 1664 the Dutch colony further north at the mouth of the Hudson River on Manhattan Island and adjacent Long Island as New Netherland with Fort Amsterdam and the village of New Amsterdam followed by the previous Swedish colony on the upper Delaware River at Fort Christina and New Sweden, which the Dutch attacked and occupied several years earlier.

[10] By the mid-19th century, the descendants of these landholders were farmers attempting to make a living off the relatively poor sandy infertile land.

The Camp Meeting Association disbanded in 1881, and in 1891, the location was incorporated by the General Assembly of Delaware (state legislature) as "Cape Henlopen City".

The arrival of the railroad allowed visitors to come in from northern Delaware and Pennsylvania and its cities and towns, leading to the beginning of Rehoboth Beach as a tourist destination.

[14] After the railroad came to Rehoboth Beach, the center of camp meetings and city life moved to nearby Baltimore Avenue.

A paved highway was built by the state between Georgetown and Rehoboth Beach in 1925, which helped bring in travelers from the west in the metropolitan areas of Washington, D.C.; Baltimore; other parts of Maryland; and Northern Virginia.

Two CAP airmen, Captain Hugh R. Sharp of Greenville, Delaware and First Lieutenant Edmond Edwards of Newark, Delaware, would go on to be the first civilians to receive the Air Medal after a search and rescue mission on July 21, 1942, where they rescued one crewmember of another CAP aircraft which crashed at sea.

[16] The Delaware Public Archives placed a historical marker on the site of the former airport commemorating Coastal Patrol Base 2 in 2006.

Vacationers are drawn for many reasons, including the town's charm and the absence of a sales tax in Delaware.

[21] Due to its proximity to Washington, D.C., Rehoboth Beach is a popular summer destination among members of the United States Congress.

[27][28] The visible presence of more LGBT people during this era and the resulting community backlash coincided with the national AIDS crisis and the Moral Majority.

[29] During the 1990s, a coterie of gay and lesbian activists challenged the town's anti-gay policies and sentiments to Create A More Positive Rehoboth (CAMP).

[31] Today, there are a large number of LGBT-owned and operated businesses; LGBT people are well-represented in town governance.

Dogfish Head Brewery's original brewpub is located on the town's main strip Rehoboth Avenue.

[39] Grotto Pizza was founded in Rehoboth Beach in 1960 and has grown to 23 locations throughout the state of Delaware along with parts of Maryland and Pennsylvania.

[40] The restaurant scene in Rehoboth Beach was traditionally centered in the downtown area, which remains competitive.

In the 21st century, a restaurant scene has begun to develop along the Delaware Route 1 corridor, where parking is more available and accessible.

[41] In 2011, the city passed a smoking ban covering parks and playgrounds, but sparing the beach and boardwalk.

Rehoboth Beach is bordered on the east by the Atlantic Ocean, on the north by the town of Henlopen Acres, and on the west and south by unincorporated portions of Sussex County.

The plant hardiness zone in Rehoboth Beach is 7b with an average annual extreme minimum air temperature of 8.1 °F (−13.3 °C).

Martin's Lawn, located near the Anna Hazzard Museum and the Senior Center, offers a grassy area and trees.

On summer weekends and holidays, DART First State operates the Route 305 "Beach Connection" service, which runs from Wilmington to the Lewes Transit Center, with intermediate stops at the Christiana Mall, Middletown, and Dover; connections can be made at the Lewes Transit Center to local bus service to Rehoboth Beach.

[68] The Delaware River and Bay Authority operates a shuttle bus during the summer months to the Tanger Outlets and the park and ride lot in Rehoboth Beach from the Cape May–Lewes Ferry, which provides ferry service across the Delaware Bay to Cape May, New Jersey.

[77][78][79] The city's Streets Department provides trash and recycling collection to homes and businesses in Rehoboth Beach.