The settlement of the Cape Canaveral area began with the construction of a lighthouse in 1848. The location attracted pioneer families who moved to the barrier island, cleared some forest and built homes. Growth was slow, even after a group of journalists from Orlando bought in in 1890 and tried to make a development. The Great Depression saw a lot of the land payments defaulted and land reverted to the banks before being bought by newspaper owner R.B. Brossier and his son Dickson. They were dreaming of building a port and a direct route to Orlando... it didn't happen.

The space program began to grow on nearby Merritt Island in the 1950's. By 1958 the Cape Canaveral area had grown and become an enticing tax morsel for any adjacent city to annex, and in those days, once that city made a decision, those residents had no say. Fearing a takeover by nearby debt-ridden Cocoa Beach, the residents of Cape Canaveral voted to incorporate and became an official city in 1963.

The economy of Cape Canaveral is tied mainly to the tourist industry with the space industry a close second.