By the 1920s, Alexandria was a quiet little southern town, but one with an especially rich heritage. Seeking to capitalize on this history and tap into the stream of tourists who traveled through Alexandria regularly on their way to Mount Vernon, local American Legion Post 24 purchased the old City Hotel as their headquarters and museum. The building had once been known as Gadsby’s Tavern and had served a distinguished clientele including George Washington, the Marquis de Lafayette and Thomas Jefferson. Fired by the same spirit that was guiding the restorations at Colonial Williamsburg, Gadsby’s Tavern reopened to the public with a colonial costume ball in 1932, the bicentennial of Washington’s birth. The American Legion’s purchase and restoration of Gadsby’s Tavern was part of the fledgling preservation movement beginning to take hold in Alexandria that later blossomed in the face of urban renewal in the 1960s.

During the mid-1960s, the City’s leadership began to remake the old colonial port into a modern city as many of the oldest parts of town were redeveloped. Market Square, where public markets were held since the town’s founding, was cleared of 18th- and 19th-century buildings except for the 1872 City Hall, and the block was excavated to hide a parking garage under the new Square. Across South Royal Street, most of the block was similarly demolished and excavated for a series of boutiques and retail stores named Tavern Square (the development being adjacent to Gadsby’s Tavern.) As the wrecking balls swung, Alexandria’s preservation movement grew, forcing city government to protect some of the community’s landmarks. Among the buildings saved and restored during this period were The Torpedo Factory Art Center, The Lyceum and the Carlyle House, which joined Gadsby’s Tavern in undergoing extensive renovations in time for the nation’s Bicentennial in 1976.

The Old and Historic District, designated in 1946, was the third historic district in the United States, after Charleston and New Orleans. The historic African American community known as Uptown was designated as the Parker-Gray District in 1984, and in 2008 was approved for listing on the Virginia Landmarks Register. It is expected to join the Old and Historic District on the National Register of Historic Places.

Today, Alexandria still retains much of its historic character. Many late 18th- and early 19th-century townhouses and warehouses remain in the “Old Town” section of the city, along the west bank of the Potomac River. While still a residential area for many Federal employees, Alexandria is also home to many national associations, corporations, restaurants, shops and other businesses. Many old landmarks have become museums, historic sites and art galleries. Public parks line the waterfront and the river is actively used by fishermen and recreational boaters. Visitors to the National Capitol area find that Alexandria serves as a quaint change of pace from the hectic hustle of downtown Washington, a place to relax and discover what the region was like many years ago.