In the 1920s, Harlem was the center of a flowering of black culture that became known as the Harlem Renaissance. The Harlem Renaissance was a time of amazing artistic production, but ironically, blacks were sometimes excluded from viewing what their peers were creating. Some jazz venues, including most famously the Cotton Club, where Duke Ellington played, were restricted to whites only. Others, including the Renaissance Ballroom and the Savoy Ballromm, were integrated.

Though this period of Harlem's history has been romanticized, the 1920s were the time in which the neighborhood became a slum, and some of the storied traditions of the Harlem Renaissance were driven by poverty, crime, or other social ills. For example, in this period, Harlem became known for "rent parties," informal gatherings in which bootleg alcohol was served, and music played. Neighbors paid to attend, and thus enabled the host to make his or her monthly rent. Though picturesque, these parties were thrown out of necessity. Further, over a quarter of black households in Harlem made their monthly rent by taking in lodgers, who sometimes brought bad habits or even crime that disrupted the lives of respectable families. Urban reformers campaigned to eliminate the "lodger evil" but the problem got worse before it got better; in 1940, 40% of black families in Harlem were taking in lodgers.

The high rents and poor maintenance that Harlem residents suffered through much of the 20th century was not merely the product of racism by white landlords; though precise statistics are not available, wealthier blacks purchased land in Harlem, and even by 1920, a significant portion of the neighborhood was owned by blacks. By the late 1960s, 60% of the businesses in Harlem responded to surveys reporting to be owned by blacks, and an overwhelming fraction of new businesses were black-owned after that time.

In 1928, the first effort at housing reform was attempted in Harlem with the construction of the Paul Lawrence Dunbar Houses, backed by John D. Rockefeller. These were intended to give people of modest means the opportunity to live in and, over time, purchase houses of their own. The Great Depression hit shortly after the buildings opened, and the experiment failed. They were followed in 1936 by the Harlem River Houses, a more modest experiment in housing projects. And by 1964, nine giant public housing projects had been constructed in the neighborhood, housing over 41,000 people.

View of Harlem from Morningside Heights

The Apollo opened on 125th Street on January 26, 1934, in a former burlesque house. The Savoy Ballroom, on Lenox Avenue, was a renowned venue for swing dancing, and was immortalized in a popular song of the era, Stompin' At The Savoy. In the 1920s and 1930s, between Lenox and Seventh avenues in central Harlem, over 125 entertainment places operated, including speakeasies, cellars, lounges, cafes, taverns, supper clubs, rib joints, theaters, dance halls, and bars and grills.

Though Harlem musicians and writers are particularly well remembered, the community has also hosted numerous actors and theater companies, including the New Heritage Repertory Theater,^[ National Black Theater, Lafayette Players, Harlem Suitcase Theater, The Negro Playwrights, American Negro Theater, and the Rose McClendon Players. In 1936, Orson Welles produced his famous black MacBeth at the Lafayette Theater in Harlem. Grand theaters from the late 19th and early 20th centuries were torn down or converted to churches, and Harlem lacked any permanent performance space until the creation of the Gatehouse Theater in an old pumping station on 135th St in 2006.