In 1935 Kenyon and Karl Riddle of West Palm Beach, engineers and twin brothers, started building “Suburban Homes” on 36 acres they platted on the south side of Southern Boulevard (S. R. 80). Fill was removed to build the Seaboard Air Line Railroad overpass (now the Southern Boulevard overpass over I-95), creating a five-acre lake; Kenyon Riddle named it Cloud Lake, after Yaholoochee, or "The Cloud," a chief of the Seminole Indians during the Second Seminole War. When the residents of the area decided to incorporate in 1951, they used the name for the Town of Cloud Lake.
Today Cloud Lake is bordered on the east by I-95 and the City of West Palm Beach, on the north by Palm Beach International Airport, and on the west and south by the Town of Glen Ridge. U.S. Census reported 167 people living in Cloud Lake in 2000, the smallest population in Palm Beach County.