Lapel was platted in 1876 and was at one time home to movie theatres, a Ford dealership, bowling alley, putt-putt golf, a large rock quarry, canning factory, jewelry shops, and two small department stores. However, Lapel's proximity to the cities of Anderson and Indianapolis caused much of that business activity to eventually relocate. Today the town is known for its glass factory, golf club, and an annual Village Fair that attracts numerous visitors in early summer. The town has experienced new residential and commercial development in recent years, and antique gas lights have been installed along the main street with plans to continue installing them along the SR 13/Pendleton Avenue corridor.
According to the United States Census Bureau, the town has a total area of 0.8 square miles (2.0 km²).
Lapel contains an elementary school, a junior high school, and a high school. A new high school building was finished in December 2007. Lapel schools are a part of the Frankton-Lapel School Corporation in central Madison County.
There were 749 households out of which 34.6% had children under the age of 18 living with them, 55.3% were married couples living together, 12.8% had a female householder with no husband present, and 28.6% were non-families. 26.0% of all households were made up of individuals and 11.9% had someone living alone who was 65 years of age or older. The average household size was 2.48 and the average family size was 2.96.
In the town the population was spread out with 27.5% under the age of 18, 7.9% from 18 to 24, 30.9% from 25 to 44, 21.1% from 45 to 64, and 12.6% who were 65 years of age or older. The median age was 35 years. For every 100 females there were 94.2 males. For every 100 females age 18 and over, there were 86.7 males.
The median income for a household in the town was $41,389, and the median income for a family was $48,083. Males had a median income of $38,854 versus $24,727 for females. The per capita income for the town was $18,887. About 4.8% of families and 5.7% of the population were below the poverty line, including 7.7% of those under age 18 and none of those age 65 or over.