Southwest Ranches became an incorporated town in 2000, primarily to preserve the residents' rural way of life but also to prevent Pembroke Pines from annexing them to raise their taxes and lower their services.

Most folks felt the name was in keeping with their equestrian lifestyle and the fact the area was composed primarily of small ranches in the southwestern corner of Broward County. To further their general equestrian lifestyle the town has developed miles of multi-use trails and has acquired the land for seven open-space parks, only one of which has been developed.

The residents get their police services from Broward County Sheriff's Office and their emergency services from the town of Davie.

Since 2000, Southwest Ranches has annexed several adjacent neighborhoods in an effort to bolster their tax income.