The Gimghoul neighborhood is associated with a prominent bluff that first attracted attention when the University was established, Early maps of the town of Chapel Hill, laid out in 1792, show that the main street through the campus, now Cameron Avenue, was originally named Point Prospect Avenue. The name was derived from the bluff known as Point Prospect, located a short distance east, that overlooked a large flat plain. A hundred years later, a student society renewed the fascination with the promontory. The bluff became a sacred spot to the secret society of university students known as the Order of the Gimghouls, founded in 1889. In 1913 the order purchased about ninety-four acres surrounding the bluff. In order to finance the construction of a lodge, known as Gimghoul Castle, near the bluff, the Gimghouls subdivided the western section of about thirty-five acres as a residential subdivision in 1924. The Gimghoul neighborhood was the first housing development in Chapel Hill outside the original village.

Prominent real estate developer George Stephens of Charlotte, an alumnus member of the order and developer of the Charlotte suburb of Myers Park, supervised the planning. Gimghoul alumnus T. Felix Hickerson, a university engineering professor and well-known road designer, drew the palt in 1924. The subdivision consists of Gimghoul Road, which extends straight from Country Club Road to the castle, and Glandon Drive, which extends from the eastern end of Gimghoul Road and twists along the hilly terrain back to the beginning of Gimghoul Road. The small Ridge Lane extends through the center of the subdivision, whose average lot size is one-half acre. The street names reflect the romantic medieval mythology of the Gimghouls. Glandon Drive got its name from Glandon Forest, the name given to the woods around Piney Prospect. Gimghoul Road leads directly to the castle The neighborhood comprises about three dozen one- and two-story frame and brick houses, built primarily from 1924 to the late 1930s. Most of the houses have Colonial Revival design and were built from popular plans by area contractors. Durham architects William Van Sprinkle, George Watts Carr, and George Hackney designed a number of the houses. With its sidewalks of traditional Chapel Hill gravel (a fine-grained gravel that looks like sand) and many stone walls along the street frontages, the neighborhood has the unpretentious tradition that permeates Chapel Hill. Using funds partially derived from the subdivision, Gimghoul Castle was begun in 1922 and completed in 1927.