Islip Terrace is a hamlet and census-designated place (CDP) in the Town of Islip in Suffolk County, New York, United States. The population was 5,389 at the 2010 census.HistoryIn 1914, a New York City real estate agent developed houses in the woods between East Islip and Central Islip State Hospital. Many who worked in the hospital lived here. The hamlet was originally called Germantown to attract people of German origin, but was renamed Islip Terrace because of German involvement in World War I.GeographyIslip Terrace is located at .According to the United States Census Bureau, the CDP has a total area of 3.5km2, all land.DemographicsAs of the census of 2000, there were 5,641 people, 1,755 households, and 1,463 families residing in the CDP. The population density was 3,985.3 per square mile (1,533.8/km²). There were 1,784 housing units at an average density of 1,260.4/sq mi (485.1/km²). The racial makeup of the CDP was 95.82% White, 0.50% African American, 0.04% Native American, 1.49% Asian, 1.08% from other races, and 1.08% from two or more races. Hispanic or Latino of any race were 6.61% of the population.