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Located on the eastern edge of the City of Charlottesville, Woolen Mills is one of the oldest neighborhoods in the city. The neighborhood is bounded on the north by East High Street. The Rivanna River and the CSX railroad form the eastern and southern edges of the neighborhood. Meade Avenue creates the western boundary of the neighborhood. The neighborhood was developed around Charlottesville Woolen Mill during the later half of the 19th Century.

The mill operated from the mid 1850's until the 1960's, when the mill permanently closed. The Woolen Mill was the primary employer for most of the early families who lived in the Woolen Mills. Prior to its closing in the 1960's, the mill was the center of activity for the Woolen Mills neighborhood. The early houses in the Woolen Mills were built by the Mill for the employees. The Woolen Mill building is located just east of the Charlottesville municipal boundary within Albemarle County.

The historically non-denominational Woolen Mills Chapel was built by the Charlottesville Woolen Mill in the 1880's to provide a worship and meeting space for the mill workers, the early residents of the Woolen Mills community. The Woolen Mills chapel was used for church services as well as other community activities. Today, the chapel is still used for worship services and neighborhood meetings.

The housing in the neighborhood is predominantly single family with some mixture of other housing types. A variety of land-uses and zoning co-exist in Woolen Mills, including some industrial uses together with residential. Some neighborhood markets serve the Woolen Mills community. Meade Park is a recreational center for the community. Riverview Park and the Rivanna Greenbelt Trail provide additional recreational amenities to the neighborhood and the community at large. Residents of Woolen Mills value the diversity of the neighborhood and the neighborhood's rural feel, and its access to the Rivanna River.