Norwood began as a dairy farm owned by the Varian family. It is commonly believed that the neighborhood's name comes from the name "North Woods." In fact, several Revolutionary War battles were fought in this once densely wooded area and the foreign heroes of the time have been immortalized in the names of several Norwood Streets (DeKalb [Germany], Rochambeau [France], and Steuben [Germany].

For a couple of decades in the late 20th Century, Norwood became known as "Little Belfast" after many immigrants from Northern Ireland settled in the area. The area was also known as Bainbridge after the commercial area of Bainbridge Avenue and East 204th Street. Today, Norwood is home to several landmarks such as the prestigious Montefiore Hospital and Medical Center, built in 1912 and is the Bronx's largest private employer.

The Williamsbridge Oval Park, also known as the Oval or Oval Park, is also a central feature in this community. In 1888, there was a Reservoir built in this area but it became too small for the city's needs and was eventually turned into a park and recreation center.

Other New York City landmarks in the Norwood neighborhood include the Valentine-Varian House, which houses the Museum of Bronx History; and the old Williamsbridge Reservoir Keeper's House, which was bought and restored by the Mosholu Preservation Corporation for use as a community space. Several modern-day icons such as baseball Hall of famer Frankie Frisch, award winning director Rob Reiner and fashion icons Calvin Klein and Ralph Lauren have called Norwood their home.