Lauderdale-by-the-Sea is in between Fort Lauderdale and Sea Ranch Lakes. The town is on land that is essentially a long narrow island separated from the mainland by the Intercoastal waterway (spanned by draw bridges), stretching some half dozen blocks to the Atlantic Ocean. The town is centered on the junction of United States Highway A1A and Commercial Boulevard. The main industry is tourism; the town has many hotels, motels, and residences used especially during the winter by visitors. At the ocean end of Commercial is a long wooden fishing pier or wharf.
According to the United States Census Bureau, the town has a total area of 3.2 km² (1.2 mi²). 1.3 km² (0.5 mi²) of it is land and 1.9 km² (0.7 mi²) of it is water. The total area is 59.35% water.
As of the census of 2000, there are 2,563 people, 1,529 households, and 608 families residing in the town. The population density is 1,940.4/km² (5,072.3/mi²). There are 2,366 housing units at an average density of 1,791.2/km² (4,682.4/mi²). The racial makeup of the town is 96.45% White, 0.74% African American, 0.12% Native American, 0.90% Asian, 0.00% Pacific Islander, 0.86% from other races, and 0.94% from two or more races. 5.27% of the population are Hispanic or Latino of any race.
There are 1,529 households out of which 7.0% have children under the age of 18 living with them, 34.4% are married couples living together, 3.5% have a female householder with no husband present, and 60.2% are non-families. 50.2% of all households are made up of individuals and 21.0% have someone living alone who is 65 years of age or older. The average household size is 1.68 and the average family size is 2.38.
In the town the population is spread out with 8.0% under the age of 18, 2.6% from 18 to 24, 25.4% from 25 to 44, 30.2% from 45 to 64, and 33.9% who are 65 years of age or older. The median age is 54 years. For every 100 females there are 98.2 males. For every 100 females age 18 and over, there are 99.4 males.
The median income for a household in the town is $38,804, and the median income for a family is $56,010. Males have a median income of $41,424 versus $26,591 for females. The per capita income for the town is $34,216. 8.4% of the population and 3.8% of families are below the poverty line. Out of the total people living in poverty, 10.1% are under the age of 18 and 6.5% are 65 or older.