Saltsjöbaden (lit.'the Salt Sea baths') was developed as a resort by Knut Agathon Wallenberg, a member of the wealthy and influential Wallenberg family, from farmland which he bought in 1891 through a newly created railway company.
Saltsjöbaden was an independent municipality from 1909 to 1970. In 1971 it was reintegrated into Nacka Municipality.
Two luxurious hotels (1893) and a sanatorium were built, designed by architect Erik Josephson. The parish church, Uppenbarelsekyrkan (the "Church of the Epiphany"), was built in 1910–13 and designed by Ferdinand Boberg with decoration by Olle Hjortzberg and Carl Milles, among others. The remainder of the land bought by the railway company was subdivided into plots; with the railway facilitating communications with the city, Saltsjöbaden soon became a popular suburb for the upper and upper-middle classes who purchased plots and developed them with spacious private houses.
The Stockholm Observatory was located in Saltsjöbaden (see Saltsjöbaden Observatory) from 1931 to 2001. It has a 40 inch (102 cm) Grubb reflector and a double refractor telescope. The asteroid 36614 Saltis, discovered there in 2000, was named after a common nickname of the place. The hilltop premises are now a school.
Alice Habsburg, aristocrat and Polish resistance figure, died in Saltsjöbaden in 1985.
Kang Youwei, the reformer of Great Qing Imperial, visited Sweden after the failure of the Hundred Days' Reform. He bought an islet off Saltsjöbaden in 1904 and stayed there until he left Sweden in 1907. The islet is sometimes referred to in Chinese as Kang Youwei Island.[6][7]