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.