The modern city of Stanwood was later founded in 1866 as Centerville, adopting its current name in 1877 after the arrival of postmaster Daniel O. Pearson.

Since the 1990s, Stanwood has grown into a bedroom community for Seattle and Everett and has annexed uphill areas that were developed into suburban subdivisions.

Stanwood is primarily served by State Route 532, which connects Camano Island to Interstate 5, and also has a train station that opened in 2009.

[6] At the time of the Point Elliott Treaty in 1855 there was a Stillaguamish village at the mouth of the river consisting of three large potlatch houses with an estimated population of 250 people.

[13] The surrounding area was cleared by loggers and managed using a series of levees along the Stillaguamish River before being opened for settlement by farmers and ranchers.

[14] The establishment of a Norwegian Lutheran church in 1876, the first to be built in the Pacific Northwest, brought the area's first wave of Scandinavian immigrants.

[6] The townsite's plat was filed by W. R. Stockbridge in 1888,[14][16]: 500  ahead of a failed attempt to petition the county commission for incorporation as a city.

[6][19] By the end of the decade, the town had rebuilt its main street and gained a weekly newspaper, cannery, horse racing track, creamery, and a shingle mill.

[10][23] The Seattle and Montana Railroad (later absorbed into the Great Northern Railway) was constructed through the Stanwood area in 1891, but bypassed the town one mile (1.6 km) to the east, where it built a depot on ground that was less prone to flooding.

[22][24] Merchants in the old town boycotted the railroad and acquired a steamboat, the City of Stanwood, in 1893; the ship was lost after catching fire on Port Susan the following year.

[17][22] The "Twin City" maintained separate government facilities, schools, banks, sawmills, creameries, and frozen food plants.

[17][28] The high cost of a modern sewage treatment system, required by the state government before further expansion could occur, spurred leaders in both cities to place a second consolidation referendum before voters on March 8, 1960.

[17] The referendum was passed by an overwhelming majority of voters in both cities and the merged government immediately approved a $520,000 sewer installation contract.

[36] In 2005, the city rejected a bid by Wal-Mart to build a store in Stanwood after public outcry from supporters of downtown businesses.

[50]: 2–14  The Stanwood area was formed during the Pleistocene glaciation and was further shaped through the rise and fall of the sea level as well as sedimentary deposits from the Skagit and Stillaguamish rivers.

[45][54] Much of the Stillaguamish delta was reclaimed using a series of levees and dikes that were built in the 1870s and improved by the Works Progress Administration in the 1930s and the city government in the 1990s.

[58] Several civic buildings have also been relocated uphill from the downtown area to prevent floods from hampering the city's vital functions.

[61] The most common occupations for Stanwood residents are in the education and health care sector, which employs 24.1 percent, followed by manufacturing (17.5%), retail (13.3%), and entertainment and food services (11.2%).

The most common commuting destinations for Stanwood residents include Everett, with 15 percent of traffic, Seattle (8.5%), Mount Vernon (5%), Arlington (4.6%), and Marysville (4.5%).

[61] The city's largest employers are the Stanwood-Camano School District and the Josephine Sunset Home, which provide approximately 550 and 303 jobs, respectively.

[63] The budget funds various departments run by the government, including water utilities, parks and recreation, development planning, and clerks.

[90][91] In February, the area hosts a glass treasure hunt and a birding festival to coincide with the migration of snow geese and other winter flocks.

[92][93] During the summer months, the city organizes weekend concerts at various venues around downtown and hosts a farmers' market on Fridays from June to October.

[94][95] Stanwood's two late summer festivals, the Community Fair and Harvest Jubilee, are focused around the region's agricultural tradition.

[96][97] The Harvest Jubilee, held since 2007 in late September, includes fine art exhibitions, produce contests, and self-guided tours of local farms.

[99] In 2014, the city began development of new multi-million dollar parks at the former Hamilton lumber mill and Ovenell dairy farm, both located along the Stillaguamish River near downtown.

[101][102] The 15-acre (6.1 ha) Ovenell site was cleared of its historic barn in 2017 and will include a boat launch, natural habitats, and a demonstration farm when fully completed in the 2020s.

[113] The city's other NRHP listing, the three-story Stanwood IOOF Public Hall, was built in 1903 for use by various fraternal organizations (including the International Order of Odd Fellows) until it was acquired by the historical society in 1996.

Community Transit runs local bus service from Stanwood to Warm Beach, North Lakewood, and Smokey Point.

On weekdays, it also runs express buses to Lynnwood City Center station, the northern terminus of the Link light rail system, and peak-only service to the Boeing Everett Factory from a park-and-ride near Interstate 5.