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Midwood lies between the original Dutch town of Flatbush and the English town of Gravesend.  Because of its thick forests, the Dutch called it Midwout (middle woods).

The neighborhood became known for its rich film history after it attracted the Vitagraph film company in 1906, which opened a studio at Locust Avenue and East 15th Street. Silent movies and cartoons splashed onto its screens in Midwood and in 1925, Vitagraph opened a second studio in Hollywood that was bought out by Warner Brothers. Live telecasts of The Cosby Show were filmed in the old Vitagraph studios in the 1980s.

Midwood was discovered by would-be residents after the Brooklyn-Manhattan Transit line of the subway opened in 1908 and the Interborough Rapid Transit line was extended there in 1920.

The area became densely settled and eventually attracted large numbers of Orthodox Jews who helped shape Midwood to how it looks today. Already-large houses were expanded to accommodate families with many children and many homes were converted to shtieblech, which serve as small synagogues.