American Beach was established in 1935 on Florida's east coast under the leadership of Abraham Lincoln Lewis, one of seven co-founders of the Afro-American Life Insurance Company, and one of Florida's first black millionaires. His vision was to create a beach resort as a benefit for company executives and as an incentive for employees.

In the era of Jim Crow segregation laws, few public places in Florida or the rest of the South were open to African Americans. From the Depression until well into the 1960's, American Beach served as a holiday and vacation destination for thousands of African Americans, and was a magnet for black celebrities such as entertainers Cab Calloway and Ray Charles, heavyweight boxing champion Joe Louis and writer Zora Neale Hurston.

But in 1964, the area began to decline. Hurricane Dora destroyed much of the beach, and passage of the Civil Rights Act meant that blacks were, finally, no longer restricted to segregated beaches and the businesses that catered to them.