The Woodlands was conceived after the oil industry investor George P. Mitchell attended a symposium by the Rouse Company subsidiary American City Corporation and developer of Columbia, Maryland. on how to develop new towns using the HUD Title VII program. It was dedicated by George P. Mitchell in 1974 and managed by The Woodlands Corporation as an extension of Mitchell Energy & Development. Mitchell, an oil businessman, planned to establish a conference center, hotels, office parks, retail malls, schools, large distribution centers, and golf courses. Houses would range from moderately low to expensive and large. Bill Schadewald of the Houston Business Journal said that Mitchell wanted the development to "entice city slickers looking for far-flung suburban quality of life". Schadewald said that local sources stated that the HUD New Town program, a federally funded program, had a "low survival rate" and questioned whether The Woodlands would succeed.
The Woodlands Corporation was acquired on July 31, 1997, by a partnership between Morgan Stanley and Crescent Real Estate Equities. In December 2003, The Rouse Company acquired Crescent's interest, and Rouse was bought by General Growth Properties on November 12, 2004. In 2011 The Woodlands was sold to the Howard Hughes Development Corporation.
The land was previously occupied by the Grogan-Cochran Lumber Mill, hence Grogan's Mill and Cochran's Crossing neighborhoods, called "villages". The original planning utilized many of the planning concepts and design consultants employed in other well-regarded new communities of that era such as Columbia, Maryland, Irvine Ranch, California and Reston, Virginia. The original development plan included environmental design principles espoused by Ian McHarg, a distinguished landscape architect, teacher and author of the seminal work Design With Nature.
It continues to grow residentially and commercially as many companies are moving there. In addition to Chevron Phillips, Huntsman Corporation, Hewitt Associates, Lexicon Pharmaceuticals, Maersk, M&S Engineering and Woodforest National Bank have set up operations. The Town Center includes shopping and eating facilities as well as a waterway resembling the San Antonio River Walk.
On September 13, 2008, it sustained extensive damage from Hurricane Ike. Sustained winds of 85 mph (137 km/h) brought down thousands of trees, powerlines, and billboards in the area and severely damaged the Cynthia Woods Mitchell Pavilion. Ike was the first hurricane to directly affect the area since Hurricane Alicia in 1983.
The summer of 2011 brought an unprecedented drought throughout Texas, which caused thousands of trees to die and requiring they be taken down, a process that continued into 2012.
In 2011, Schadewald said "Now: Obviously, The Woodlands had quite a future. Somewhere between First Colony and The Woodlands, I realized why visionary real estate developers strike it rich more often than skeptical real estate reporters."
In 2012, the U.S. Census Bureau designated the area around The Woodlands and Conroe as a "large urbanized transit area", defined as having over 200,000 residents, making it eligible to receive federal transportation funds.
From 2004-2018, water taxis known as "Waterway Cruisers" traveled along The Woodlands Waterway. On November 13, 2018, after suffering damage from Hurricane Harvey the year before, the six Waterway Cruisers were removed from the waterway