Whitley appears in the historical record around 1100, when Henry I conferred it on the Priory of Tynemouth. The medieval scribes spelled it many ways: Witelei, Wyteley, Hwyteleg, Witelithe, Wheteley. In 1292 a valuation of the Priory's holdings put the yearly rents from Whitley at 20 shillings, the tithes at 9 marks - money collected, by papal grant from Pope Nicholas IV, to fund a Crusade. On 9 April 1345 Edward III granted Gilbert de Whitley a licence to crenellate his manor house. Only about two percent of small tower houses in the period had royal licences; the crenellations were both defence and status symbol during the Edwardian wars with Scotland. After the Dissolution of the Monasteries, the manor passed through the Percys, the Dudleys, and eventually the Smithson Dukes of Northumberland, in whose descendants it remains today. Underneath the medieval surface lay coal. Mining and limestone quarrying drove the local economy for centuries, including at Monkseaton, which forms the north-west of the modern town.

When the coalfields began to decline in the late nineteenth century, Whitley reinvented itself. The North Tyne Loop railway opened in 1882, connecting the coastal villages to Newcastle. Day-trippers arrived. Boarding houses, ballrooms, ice rinks, theatres, and amusement piers followed - the standard furniture of British seaside resort towns, but laid out along a particularly fine stretch of clean sand. The Spanish City - a domed pleasure palace on the seafront, opened in 1910 - became the town's emblem. For most of the twentieth century it was home to a theme park. The park closed in 2000 and the dome fell into decay. The 2018 reopening, after a long campaign by North Tyneside Council, restored both building and pride. Parkdean Resorts still operates a caravan park here. The promenade still draws families. The Metro's Yellow Line still puts central Newcastle twenty-five minutes away by train.

Just north of the town centre, St Mary's Island - sometimes called Bait Island - is a small rocky tidal islet linked to the mainland by a concrete causeway that submerges at high tide. The 1898 lighthouse on the island is now decommissioned, a museum and visitor centre rather than a working light, but it remains the most recognisable feature on the coast for miles. Coal seams are exposed in the cliffs just north of the island, dark bands of stratified seam material running visibly through the sandstone, and at low tide you can still pick up coal from the beach. The seams run all the way north to Seaton Sluice. Whitley Bay's geography is unusual in this respect - a Victorian seaside town built on top of, and next to, the coal seams that sustained the country's industrial revolution. The cliffs are a working geology lesson in stratigraphy.

Whitley Bay has produced a surprisingly long roster of well-known people. Sam Fender, the singer-songwriter whose albums have topped UK charts, attended Whitley Bay High School's sixth form. Kate Adie, the BBC News chief correspondent who reported from war zones for two decades, was born here. Gladstone Adams, the man who invented the windscreen wiper, served as the town's mayor. Hilton Valentine of The Animals, who played the rolling arpeggio that opens House of the Rising Sun, grew up in the town. The author of Biggles, W. E. Johns, lived here around 1925. So did Andrea Riseborough, the actor, and Stephen Tompkinson, and the Newcastle United player Steven Taylor, and the YouTuber WillNE. Ann Cleeves set her crime novel The Seagull in Whitley Bay; Ross Welford sets many of his children's books here. It is, for a town of 38,323 people, an unusually prolific patch of ground.