The city was settled in 1897 along what is now Boston Avenue and incorporated in 1940. It was settled by Dutch immigrants on land sold by the Kansas City Southern railroad. It is part of the Beaumont−Port Arthur Metropolitan Statistical Area. Nederland is also a part of an area known as "the Golden Triangle," which comprises Beaumont, Port Arthur, and Orange. The city is adjacent to the Jack Brooks Regional Airport in Port Arthur, which serves the nearby cities of Beaumont and Port Arthur.
Nederland was founded in 1897 by Dutch settlers (Nederland which literally translates to "Lowland" (non-plural) is the Dutch name for the Netherlands which means "low lands") as a repayment for financial services of Dutch bankers who financed the Kansas City Southern railroad line that runs through the center of the city. The more prominent families were named Rienstra, Doornbos and Van Oostrom, and their descendants still live in the area today. Tradition says they were attracted to the flat coastal terrain that reminded them of their homeland (although the heat most certainly did not). The downtown area continues to bear its English and Dutch street names today.
Nederland's early economy was driven by rice and dairy farming. However, the depression of 1907 and overproduction caused the rice industry in the town to collapse. Many Dutch settlers moved away from the area during this time, but a small percentage remained. After the Spindletop gusher discovery of 1901 and the establishment of the Sun Oil terminal near Nederland, the town became a residential community for the workers of the nearby oil terminals.
Nederland became incorporated as a township in 1940. The surrounding larger cities of Beaumont, Port Arthur, and Orange came to be known as the Golden Triangle. In the 1940s and 1950s, the Port of Port Arthur, and the Port of Beaumont were as important as New Orleans, Houston, or Galveston, and Nederland thrived as a result.
The refineries also attracted a large population of blue-collar laborers into the area. The area drew particularly heavily from southern Louisiana, and a strong Cajun flair is evident throughout the community. With the decline of oil prices in the 1980s, the local economy suffered and Nederland experienced slight population losses, but has stabilized in the late 1990s and 2000s.
Nederland is the ending location of the Keystone Pipeline.