Örby got its name from the Örby Manor (Örby slott), as does the neighbouring residential area of Örby slott. Örby was instituted as a so-called "municipalsamhälle" (a kind of borough within a rural municipality) within Brännkyrka in 1904. The area was amalgamated with the City of Stockholm in 1913 and the municipalsamhälle was dissolved. In the present administration of the city, it is part of the Enskede-Årsta-Vantör stadsdelsnämndsområde (borough).
Örby was served by trams between 1930 and 1951 (line 19, at the time called Örbybanan, "the Örby line"), but has now bus connections with the Stockholm Metro at the stations in Bandhagen, Svedmyra and Högdalen as well as the Stockholm commuter rail station at Älvsjö.
The first school in Örby was called the "red school" because of its wall colour. It was built in 1904. This was replaced by Örby skola in 1915, designed by architect Georg A. Nilsson. It looks exactly like the schools in Gamla Enskede and Långbro and is sometimes mistaken for a church due to its size and shape.