Palm Heights Park takes its name from a subdivision laid out in 1910 by developers Walton D. Hood, B. Louis Raborn and J. Royston Williams who named many of the streets for themselves and family members. The area was bounded by Walton Avenue on the north, Louis Avenue (today Winnipeg) on the south, Somerset Boulevard (today Nogalitos Street) on the east, and Mildred Street (today Phyllis Street) on the west. The San Fernando streetcar line ran south along Marian Street through the center of the neighborhood and ended at the area that was set aside for a park.
When the developers experienced financial difficulties, the remaining lots were sold by court order in 1925 to satisfy debts. The land was purchased by V.W. Mills of Philadelphia in 1925. Mills did not live in San Antonio, but was associated with local investors. He agreed to construct a sewer system in Palm Heights, and in September 1928, also transferred the subdivision’s streets and park to the City of San Antonio. At the time, Mills stated that there were 162 houses in the Palm Heights Addition.
Palm Heights Park was originally bisected by Marian Street and was informally called "Twin Parks." Soon after the park was acquired, City Parks Commissioner Jake Rubiola promised residents that a playground and tennis courts would be constructed there. In August 1929, a contract was signed for construction of cold rolled asphalt tennis courts in Palm Heights Park. The following year, in December 1930, the city awarded a contract to construct a community center at a cost of about $6,600. The building, designed by the firm of Wilder and Smith, was completed in early 1931.
The park remained largely unchanged until 1952 when Marian Street was closed and the twin parks were consolidated into one tract of land. In 1955, a concrete recreation slab was constructed adjacent to the recreation center. The following year, architect Robert H. Hugman drew plans for an addition to the building that was completed at a cost of $10,250 in 1956. The building was rehabilitated in 1977 and a gymnasium was added. A new multi-use addition was completed in 1998, funded with $233,770 in 1994 Park Bond funds. Other facilities in the 1.72-acre park include tennis courts, a basketball court, volleyball courts, a junior softball diamond, and a football field.