During World War II it was the home base of the largest Luftwaffe airbase in northern Germany, with Jagdgeschwader 400 operating the Messerschmitt Me 163 Komet rocket fighter from the base, which was heavily bombed. Following the War, the airbase was converted to a golf course.
The main economic activities of Bad Zwischenahn were and are based on tree nurseries, the food industry (sausage and ham production), and resort community services for the well to do urban population of Oldenburg and Bremen. The lake is used for boating, bathing and recreation, with some eel fishing still undertaken.
One of the premier sites for tourists is a windmill originally built in 1811 in Westerstede. It is part of a historical museum farm consisting of 14 houses and auxiliary buildings that were moved to their today's location from 1909 to 2004. One of the buildings is called the Spieker and shelters a restaurant of the same name, integrating into the centuries-old architecture.
A major source of money is the tourism industry. There is Bad Zwischenahn above average number of apartments from private providers. These homes often have a higher standard and are awarded with 3 stars or more. The spa facilities are the reason why older people often come to Zwischenahn.
Locally smoked eels are a delicacy, particularly when served with a locally produced schnapps called Ammerländer Löffeltrunk. There is a specific local tradition (also called Ammerländer Löffeltrunk) to drink it from a tin spoon along with a special drinking cheer, each line alternately spoken by the host and the guests: