It was established on the banks of the Des Plaines River in 1959 by local steel magnate Jay Peterson.

[3] The corporate headquarters of Discover Financial and CCH are located there, as well as Orphans of the Storm, an animal shelter founded in 1928 by famous dancer Irene Castle.

In 1885 a station for the Wisconsin Central Railroad was built near the modern day intersection of Deerfield Road & N Milwaukee Avenue that overtime caused an increase in the local population.

In 1959 the locals had Riverwoods incorporated as a village in order to halt development and protect their woodlands.

A recent wave of teardowns and the lack of a local preservation ordinance led the Landmarks Preservation Council of Illinois to identify Riverwoods in 2006 as one of the Chicago region's communities most threatened by overdevelopment.

Pace provides bus service on Routes 234, 272 and 626 connecting Riverwoods to Des Plaines, Niles, Vernon Hills, and other destinations.