In 1835 several pioneers, including Anson and Lisa Taylor, set up businesses on the land originally inhabited by Potawatomi. They profited from a commercial pier and an inn that served the stagecoach traffic on the Green Bay Road.
Along with several other investors in 1867, Gurnee purchased and subdivided the land near the railway depot on the Chicago North Shore and Milwaukee Railroad line that had been completed a decade earlier. As president of the railroad company, Gurnee made a practice of buying land near stations on the route as sure investments. While he had planned to settle in Glencoe, financial insolvency forced him to return to his hometown in New York.
Upon Gurnee's failure, Alexander Hammond bought 520 acres (2.1 km²) and formed the Glencoe Company with plans for an exclusive residential community. The charter included the building of a school and a church and the hiring of a teacher and a pastor. After some early financial problems, the settlement had grown to 536 homes by 1885.
Glencoe has a Village Manager form of government. It had one of the first Public Safety Departments (combined police/fire/paramedic). It adopted the first zoning code in Illinois in 1921. It land use plan adopted in 1940 has been adhered to with minor changes since then. Most all nonconforming uses have been eliminated through attrition and developed to allowed uses shown outlined on the 1940 zoning land-use map. It is predominately single family with no industrial uses. It has a small cohesive central business district that provides most basic services including post office, library, Village Hall, performing arts theatre, train station (to Chicago), and other shopping needs.
In the last 20 years the village has experienced increasing tear-downs of smaller homes that have been replaced with larger higher quality homes. During this time major reconstruction has been completed of its street and sidewalk network. The business district has had brick sidewalks and period street lights installed. Many public buildings have been or are being remodelled and/or additions made to including the public schools, Village Hall, Library, Park District Community Center, and refrigerated outdoor ice rink. The private golf clubs (Lake Shore Country Club and Skokie Country Club)have seen major club building remodeling, additions, and reconstruction.