Clyde Nelson began developing Hollywood Boulevard as a residential subdivision in 1926. He employed a sales force of 75, armed with the memorable slogan "Out of the Smoke Zone, Into the Ozone", to entice Birmingham residents over Red Mountain. Architect George P. Turner designed many of the new homes in the [[Spanish Colonial Revival architecture|Spanish Colonial Revival style]], which had become fashionably linked with the glamor of Hollywood, California in the early days of the motion picture industry there. Turner also nodded to the English Tudor style which was already widespread in Birmingham and over the mountain.
The Hollywood Country Club on Lakeshore Drive (destroyed in 1984 by fire) and the American Legion Post 134 (originally Hollywood's Town Hall) were also built at this time.
In order to support his new development, Nelson created the area's first autobus line and extended the first natural gas pipeline into Shades Valley.
Hollywood incorporated as a town on January 14, 1927 with Clarence Lloyd as its first and only mayor. The town was annexed into Homewood on October 14, 1929. The Great Depression virtually ended development of the subdivision.
In 2002 the Hollywood Historic District was registered with the National Register of Historic Places, and is home to AIA nominated houses like 11 Bonita Street. The listing includes 412 contributing buildings and one contributing site, over a 815 acres (330 ha) area.