Based on per capita income, one of the more reliable measures of affluence, Steilacoom ranks 61st of 522 areas in the state of Washington to be ranked. The Steilacoom School District #1 consists of Cherrydale Primary School, Saltar's Point Elementary School, Harriet Taylor Elementary School, Anderson Island School, Chloe Clark Elementary School, Pioneer Middle School, and Steilacoom High School.
Steilacoom was founded by Lafayette Balch, a sea captain from Maine, and officially incorporated in 1854. It is the oldest incorporated town in Washington and has 4 individual buildings and sites listed on the National Register of Historic Places, including the oldest Catholic Church in the state and the first Protestant Church north of the Columbia River, as well as the Steilacoom Historic District, with 68 contributing properties.
Steilacoom's main source of early prosperity was the manufacture and export of lumber to San Francisco. When the United States Congress established the Washington Territory on March 2, 1853, Governor Isaac Stevens chose Steilacoom to be the seat of Pierce County.
Steilacoom was once the leading candidate to become the territorial capital and the one-time county seat, but lost its chance for dominance in the south Puget Sound region when the Northern Pacific Railroad picked rival city, Tacoma for its west coast terminus in 1873. Steilacoom has since settled into its role of suburban bedroom community.
Steilacoom had the first jail in Washington and the first sawmill. Steilacoom is also home to one of two major state run mental health facilities, Western State Hospital, on the site of what was once Fort Steilacoom. Clara Antoinette McCarty Wilt, the University of Washington's first graduate (1876), was born in Steilacoom.
According to the United States Census Bureau, the town has a total area of 2.1 square miles (5.4 km²), of which, 2.1 square miles (5.4 km²) of it is land and 0.04 square miles (0.1 km²) of it (1.43%) is water.
There are 2,570 households out of which 27.8% have children under the age of 18 living with them, 53.8% are married couples living together, 9.8% have a female householder with no husband present, and 33.0% are non-families. 26.5% of all households are made up of individuals and 7.2% have someone living alone who is 65 years of age or older. The average household size is 2.35 and the average family size is 2.83.
In the town the population was spread out with 22.8% under the age of 18, 9.2% from 18 to 24, 28.6% from 25 to 44, 26.0% from 45 to 64, and 13.3% who were 65 years of age or older. The median age was 38 years. For every 100 females there were 96.5 males. For every 100 females age 18 and over, there were 93.4 males.
The median income for a household in the town was $46,113, and the median income for a family was $54,725. Males had a median income of $40,505 versus $34,136 for females. The per capita income for the town was $27,124. About 6.9% of families and 8.1% of the population were below the poverty line, including 15.0% of those under age 18 and 3.7% of those age 65 or over.