In the late 1800s, the growing popularity of seaside summers and the development of resorts attractive to a wealthy clientele provided a new basis for economic growth, especially after the railroad was built in 1887. The Life Saving Station, Stage Harbor Light, a local newspaper, telegraph, and telephone service were added, and the first auto license was issued during this period. Coastal erosion forced the moving of the Twin Lights at James Head to the site where the Lighthouse Overlook is now located. Two new schools were needed, and the first public library was established in 1875 in South Chatham. In 1896 Marcellus Eldredge, a native son donated Eldredge Public Library to the townspeople.
The airport was built in 1930, road service was upgraded, and automobile travel soon became common. In 1950 the summer population of 5,000 greatly outnumbered 2,457 year-round residents.
Since World War II, Chatham has experienced rapid growth and has become a popular place for retirement. Housing construction has continued steadily since the war with about 1,000 new houses built per decade. Many are second homes. Currently, only about one-half of the Town's 6,300 housing units are occupied year-round; the other half are occupied seasonally. The 2010 federal census lists a population of 6,125.