Originally, Volendam was the location of the harbor of the nearby Edam, which was situated at the mouth of the IJ bay. In 1357, the inhabitants of Edam dug a shorter canal to the Zuiderzee with its own separate harbor. This removed the need for the original harbor, which was then dammed and used for land reclamation. Farmers and local fishermen settled there, forming the new community of Vollendam, which literally meant something like 'Filled dam'. In the early part of the 20th century it became something of an artists' retreat, with both Picasso and Renoir spending time here. The majority of the population belongs to the Roman Catholic Church, which is deeply connected to the village culture. Historically, many missionaries and bishops grew up in Volendam. Today there is the chapel of Our Lady of the Water, which is located in a village park.
In the New Year's night of 2000 to 2001, the lighting of a bundle of sparklers caused a short but intense fire at a party in café De Hemel. The sparklers ignited the dry Christmas decorations on the ceiling, which fell down in their entirety. 14 people died and 200 people were seriously injured.
Volendam is a popular tourist attraction in the Netherlands, well known for its old fishing boats and the traditional clothing still worn by some residents. The women's costume of Volendam, with its high, pointed bonnet, is one of the most recognizable of the Dutch traditional costumes, and is often featured on tourist postcards and posters (although there are believed to be fewer than 50 women now wearing the costume as part of their daily lives, most of them elderly). There is a regular ferry connection to Marken, a peninsula close by. Volendam also features a small museum about its history and clothing style, and visitors can have their pictures taken in traditional Dutch costumes.
Volendam was used as a spot for shooting in the well received 2014 Indian Movie, "Queen", where the actors had set up a shop to sell Indian food called Rani's Gol Gappa. The owner of the food shop was an Italian Marco Canadea (as Marcello). Working with Marco was Mish Boyko as Oleksander (Sikander), Jeffrey Ho as Taka, and Joseph Guitobh as Tim. The role of Queen was played by the famous Indian Actress Kangana Ranaut.
FC Volendam is a football club based in Volendam, which has regularly played in the Dutch Eredivisie (though they are currently in the next division down).
Volendam is also well known for its distinctive music, which is called Palingsound (literally "eel sound") in reference to Volendam's status as fishing village. During the 1960s, the local group The Cats was a very popular group in the Netherlands and abroad.
Another band from Volendam was BZN, which became popular in the late 1960s and early 1970s. In 1995 BZN performed a duet with the ten-year-old Jan Smit, who quickly became a celebrity in his own right.
The popular music groups 3JS and Nick & Simon are famously from Volendam, whose members have all participated in local musical performances through the years.