Derwood is an unincorporated area in east-central Montgomery County, Maryland. It lies just north of Rockville, south east of Gaithersburg, south west of Olney, and north west of the greater Silver Spring, Maryland area. Derwood, originally "Deer Park" then "Deer Wood," is home to approximately 15,600 people.
Derwood was first recognized in the 1880s as a train stop on the B&O Railroad, which is now the intersection of Indianola Drive and Maryland Route 355 in Derwood Station. A second, larger railroad station was built in Derwood from 1886-1889. In the early 1900s, a small community grew up around the station. On January 7, 1954, Schwartz Mill caught fire and both it and the Derwood railroad station were destroyed. Derwood station was never rebuilt, since there were not enough passengers traveling through the area. In 1965, the man-made Lake Needwood was created by impounding Rock Creek. In 1974, the Derwood post office relocated to Redland Shopping Center. It kept the name "Derwood Branch," and designated the entire 20855 zip code area as Derwood, greatly increasing its size. The community's population expanded with the establishment of Shady Grove Metro station in 1984.