As I heard the story, Woman Key got its name from a group of prostitutes who washed ashore on the key after a Spanish ship went down in a storm. The sailors apparently ended up on another island, which is named Man Key.
Today, Woman Key is a nature preserve, part of the Key West National Wildlife Refuge (KWNWR). It is a tiny uninhabited island consisting of a short beach and a lot of brush and foliage. Visitors are allowed to snorkel off shore and walk the beach, but only in a marked area.
Next to Woman Key is a small 24 acre private island that was for sale a couple years ago for a mere $3.5 million. The tiny key has four houses, desalinization, and a satellite hookup.
I recently corresponded with the Key West NWR and learned more about this tiny island. A helpful employee provided this excerpt below:
Woman Key was originally deemed as "Public Domain" land, and given to the Army in 1944 for bombing training during World War II.
When the Key West National Wildlife Refuge was established in 1908, US Fish & Wildlife was given only secondary jurisdiction over Woman Key, as the Navy had reserved primary ownership for "naval purposes", what exactly those purposes were remains unknown.
Things remained pretty quiet on the island until 1976, when then Refuge Manager Jack Watson discovered a dumptruck-sized theft of sand and major vegetation damage along the beach. He questioned workers at nearby Ballast Key (the only privately owned island within Key West NWR boundaries), who had just recently constructed a structure on recently poured concrete, and surrounded it with white sand. The watchman claimed he had just been hired days before and denied any knowledge of the sands' disappearance. The mason knew nothing of the destruction at Woman Key and attested that his sand had been shipped in from Key West. The owner of the island finally shed some light on the subject when he recalled hearing an unusual noise earlier that week. Further investigation at the Key West police station revealed a report of a bomb, lodged in the sand, half-uncovered by the seas erosive waves. It turned out to be a World War II bomb, left over from the Army's training occupation. The US Navy had been contacted and decided it safer to detonate the bomb rather than try to diffuse or move it. The explosions' aftermath left a dumptruck-sized hole in the sand. The Navy reported that other such bombs may exist on the island. Jack Watson strongly suggested that the Navy contact him before blowing up any more bombs within the Refuge.
The Navy relinquised official control of the island shortly thereafter, and Woman Key came under the primary jurisdiction of the Key West National Wildlife Refuge in 1977.
That's pretty much all I could find in our files. I searched some books and bugged some historians for other tidbits, but came up empty handed. I have heard an unverified account of how Woman Key got its name, however. The story tells of a ship bearing women of ill-repute en route to the pleasure starved wreckers of Key West. The ship ran aground, or caught fire, or fell apart, or something and all the women swam to the nearest island which when the wreckers came out to salvage the booty, they got some booty there as well. For ever after, it was referred to fondly as "Woman Key". Like I said, it's what I heard on the coconut telegraph, which is probably more exciting and entertaining than whatever the real story is! :)
National Key Deer Refuge (Admins Key West NWR)