It was first subdivided in the 1959 and the subdivision was originally marketed as "Capri Beach". In the 1962 a golf course (since closed) was constructed and the subdivision was remarketed as St. Andrews by the Sea. Originally the homes that were built were small holiday homes but later in the 20th century more substantial homes began to be built as its location became more appreciated. The price of land in this area has increased dramatically over the last 10 years.
It is in the local government area of the Shire of Mornington Peninsula. At the 2001 census, St Andrews Beach had a population of 664, at the 2007 Census the population was 769 and at the 2011 Census the population was 1,138. At the most recent Census, in 2016, the population was 889.
St Andrews Beach features a unique topography known as The Cups Country, which creates the ideal environment for golf courses. Golfers have a choice of several nearby golf courses including the St Andrews Beach Club on Sandy Road, Moonah Links off Truemans Road, and The Dunes on Browns Road.