Green Island was incorporated as a village in 1853. The Town of Green Island was formed in 1896, shortly after the final division of the original "Town of Watervliet" that created the City of Watervliet and the Town of Colonie.
The Ford Motor Company was Green Island's largest employer from 1923, when Henry Ford opened a plant in Green Island, until 1988, when the plant closed.
As of the census of 2000, there were 2,278 people, 1,073 households, and 580 families residing in the village. The population density was 1,256.5/km² (3,262.1/mi²). There were 1,188 housing units at an average density of 655.3/km² (1,701.2/mi²). The racial makeup of the village was 96.88% White, 1.32% African American, 0.13% Native American, 0.35% Asian, 0.09% from other races, and 1.23% from two or more races. Hispanic or Latino of any race were 0.75% of the population.
There were 1,073 households out of which 24.9% had children under the age of 18 living with them, 34.9% were married couples living together, 14.4% had a female householder with no husband present, and 45.9% were non-families. 38.9% of all households were made up of individuals and 12.9% had someone living alone who was 65 years of age or older. The average household size was 2.12 and the average family size was 2.83.
In the village the population was spread out with 21.2% under the age of 18, 9.1% from 18 to 24, 32.1% from 25 to 44, 22.3% from 45 to 64, and 15.3% who were 65 years of age or older. The median age was 37 years. For every 100 females there were 93.4 males. For every 100 females age 18 and over, there were 88.9 males.
The median income for a household in the village was $32,500, and the median income for a family was $38,011. Males had a median income of $31,403 versus $27,422 for females. The per capita income for the village was $17,795. About 10.8% of families and 10.0% of the population were below the poverty line, including 13.3% of those under age 18 and 5.2% of those age 65 or over.
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