Portions of the City of Prospect lie in both Jefferson and Oldham counties.
The City of Prospect was incorporated in 1974 through the efforts of the pioneers of two 1960s residential developments, Hunting Creek and Hunting Creek Country Club. Their goal was to prevent urban sprawl and restrict commercialization. In 2005 the city was granted 3rd class status, giving it home-rule or final authority for any development within its boundaries.