Atlantic Highlands was incorporated as a borough by an Act of the New Jersey Legislature on February 28, 1887, from portions of Middletown Township, based on the results of a referendum held that day. The borough was reincorporated on September 1, 1891.
Atlantic Highlands is part of the Bayshore Regional Strategic Plan, an effort by nine municipalities in northern Monmouth County to reinvigorate the area's economy by emphasizing the traditional downtowns, dense residential neighborhoods, maritime history, and the natural beauty of the Raritan Bayshore coastline.
As of the census of 2000, there were 4,705 people, 1,969 households, and 1,258 families residing in the borough. The population density was 3,805.4 people per square mile (1,465.0/km²). There were 2,056 housing units at an average density of 1,662.9/sq mi (640.2/km²). The racial makeup of the borough was 94.37% White, 2.30% African American, 0.06% Native American, 1.23% Asian, 1.02% from other races, and 1.02% from two or more races. Hispanic or Latino of any race were 3.51% of the population.
There were 1,969 households out of which 26.5% had children under the age of 18 living with them, 50.7% were married couples living together, 9.6% had a female householder with no husband present, and 36.1% were non-families. 29.7% of all households were made up of individuals and 11.4% had someone living alone who was 65 years of age or older. The average household size was 2.39 and the average family size was 3.00.
In the borough the population was spread out with 21.4% under the age of 18, 6.2% from 18 to 24, 31.8% from 25 to 44, 26.5% from 45 to 64, and 14.1% who were 65 years of age or older. The median age was 40 years. For every 100 females there were 93.5 males. For every 100 females age 18 and over, there were 88.3 males.
The median income for a household in the borough was $64,955, and the median income for a family was $79,044. Males had a median income of $60,857 versus $36,060 for females. The per capita income for the borough was $34,798. About 4.4% of families and 4.9% of the population were below the poverty line, including 5.0% of those under age 18 and 12.9% of those age 65 or over.