Chelsea takes its name from the Federal-style house of the Moore family, named after the manor of Chelsea, which was home to Sir Thomas More. The house was the birthplace of Clement Clarke Moore, who is more often credited with "A Visit From St. Nicholas" which he may have authored than with the first Greek and Hebrew lexicons printed in the United States, which he certainly authored.

Traditionally, Chelsea was bounded by Eighth Avenue, but in 1883 the apartment block, soon transformed to Hotel Chelsea helped extend it past Seventh Avenue and now it runs as far east as Broadway. The neighborhood is primarily residential with a mix of tenements, apartment blocks and rehabilitated warehousing, and its many businesses reflect that: ethnic restaurants, delis and clothing boutiques are plentiful. Tekserve, the vast computer repair shop that strongly influenced Apple's Retail Store and Genius Bar concept, serves nearby Silicon Alley and the area's large creative community. Chelsea has a large gay population, stereotyped as gym-toned "Chelsea boys." Since the mid-1990s, Chelsea has become a center of the New York art scene, as an increasing number of art galleries have moved there from SoHo.

Chelsea has recently become a melting pot of many cultures. Above 23rd Street, by the Hudson River, most of Chelsea is still industrialized, and the forgotten High Line follows the river all through Chelsea. Eighth Avenue is a center for gay culture, and from 20th to 22nd street between Ninth and Tenth Avenue, historic brownstones built over a hundred years ago are still being used. From 16th Street to 27th Street, between 10th and 11th Avenues, there are more than 200 art galleries that are home to modern art from upcoming artists and respected artists as well, such as the Gagosian Gallery, Zach Feuer Gallery, Barbara Gladsone Gallery, Andrea Rosen Gallery and David Zwirner Gallery. Along with the art galleries, Chelsea is also home to the somewhat well known Graffiti Research Lab. There are many new developments in Chelsea, including a new building built by Frank Gehry. The district was added to the National Register of Historic Places in 1977 (District #77000954).