The Hebrew word rehoboth means broad spaces. It appears three times in the Old Testament - as a well dug by Isaac, as a city on the Euphrates, and as one of the cities of Asshur in Mesopotamia. The Rehoboth Bay had carried the name for at least a century before the camp meeting was founded. The Methodists chose the place name with care: it carried Biblical resonance and the appropriate sense of openness for a religious retreat on the Atlantic dunes. The first boardwalk was built the year of the founding - 1873 - though it has been rebuilt many times since after storms and fires. The original Henlopen Hotel opened in 1879, was rebuilt in 1923 in its current Mediterranean Revival form, and still operates as one of the most visible structures on the boardwalk. The 1925 paving of the highway between Georgetown and Rehoboth brought Washington and Baltimore vacationers within affordable driving distance. By the 1930s, the town had become a Mid-Atlantic resort. The Methodist camp meeting had quietly dissolved into something more secular and considerably less austere.

The town's self-promoted nickname - The Nation's Summer Capital - has more truth to it than most municipal slogans. Members of the U.S. Congress have summered in Rehoboth Beach for nearly a century, drawn by the proximity to Washington (about 120 miles, or two to three hours by car), the Delaware sales-tax exemption, and the local social pattern that allowed politicians to relax in private without paparazzi. Joe Biden bought his first beach house in the North Shores neighborhood, just north of the Rehoboth city limits in Cape Henlopen State Park, in 1997. The house served as his Summer White House during his presidency from 2021 to 2025. John Delaney, the former Maryland congressman and 2020 presidential candidate, also owns a North Shores beach house. Tony Coelho, the former California congressman and house majority whip, has a Rehoboth address. The Washington political ecosystem comes to Delaware for July and August. The locals tolerate it, mostly, because the Secret Service tends to be polite and the politicians tip well.

Rehoboth Beach is one of the most LGBTQ-friendly resort towns on the East Coast. The town's gay-friendly identity grew out of the 1980s culinary renaissance, when a generation of openly gay restaurateurs and shopkeepers settled in the town and built new businesses. The visibility provoked backlash from some local conservatives, coinciding with the AIDS crisis and the rise of the Moral Majority. In the 1990s, a group of gay and lesbian activists organized as Create A More Positive Rehoboth, or CAMP Rehoboth, to challenge the town's anti-gay policies. CAMP Rehoboth, now an established LGBTQ community organization with a community center on Baltimore Avenue, organizes the annual Sundance fundraiser. Two openly gay town commissioners were elected in the following decade, and the town's official stance shifted. The stretch of beach at the south end of the boardwalk near Queen Street, known as Poodle Beach, has been a longtime gathering spot for gay men. North Shore Beach within Cape Henlopen State Park has long attracted lesbian beachgoers. The town has rainbow crosswalks at major intersections. The original Methodist camp meeting could not have anticipated what its name would become.

The Rehoboth Beach Boardwalk runs about one mile along the Atlantic. Funland, the small amusement park between Delaware and Brooklyn Avenues, has operated continuously since 1962 - a family-owned operation that has kept its prices low and its rides modest in scale. Grotto Pizza, the regional pizza chain founded in Rehoboth in 1960, has grown to 23 locations across Delaware, Maryland, and Pennsylvania; the original Grotto on Rehoboth Avenue is still where many summer visitors first taste the heavy, swirled-sauce pies. The Dogfish Head Brewery's original brewpub on Rehoboth Avenue helped invent the modern American craft beer scene - founder Sam Calagione opened it in 1995, started bottling his beers in 1996, and built a national brand around extreme beers like 60 Minute IPA and 90 Minute IPA. Dogfish Head is now owned by Boston Beer Company, but the Rehoboth brewpub remains the original site. The Rehoboth Beach Bandstand, on Rehoboth Avenue near the boardwalk, has hosted free outdoor concerts every summer since 1963. More than 50 bands play the bandstand each season. The Tanger Outlets along DE-1 west of town hold over 130 outlet stores, drawing tax-free shoppers from the entire mid-Atlantic.

The Sea Witch Festival, held the last weekend in October, is Rehoboth's signature Halloween event - a parade, costume contests, dog parade, and street festival drawing tens of thousands of visitors at the very end of the season. The festival began in 1989. It now extends the tourism economy three weeks past Labor Day and helps the town's restaurants survive the long off-season. The town has run several other annual festivals: the Rehoboth Beach Independent Film Festival, the Autumn Jazz Festival, the Hometown Christmas. The 1,108 year-round residents recorded in the 2020 census are mostly retirees - the median age in town is 57, the highest of any Delaware municipality. Summer doubles, triples, or quadruples that population. In May 2025, the city implemented an under-18 curfew restricting minors from public places between 11 p.m. and 5 a.m. unless accompanied by a parent or guardian - a response to large groups of teens that had been gathering late at night on the boardwalk. The 2024 parking fee increase to $4 per hour, the 2017 beach tent ban, and the 2014 boardwalk smoking ban all reflect a town that has been incrementally tightening control over what visitors can do. The Methodist camp meeting set the original rules. The 2020s town is still negotiating its own.