As of the censusGR2 of 2000, there were 4,478 people, 1,664 households, and 1,264 families residing in the village. The 2004 census estimates that there are now 5,381 people residing in the village, and Canal Winchester may become a city within the next year or two. The population density was 271.4/km˛ (702.9/mi˛). There were 1,779 housing units at an average density of 107.8/km˛ (279.2/mi˛). The racial makeup of the village was 95.60% White, 2.19% African American, 0.38% Native American, 0.67% Asian, 0.04% from other races, and 1.12% from two or more races. Hispanic or Latino of any race were 0.51% of the population.

There were 1,664 households out of which 37.3% had children under the age of 18 living with them, 65.6% were married couples living together, 7.6% had a female householder with no husband present, and 24.0% were non-families. 20.9% of all households were made up of individuals and 9.8% had someone living alone who was 65 years of age or older. The average household size was 2.61 and the average family size was 3.04.

In the village the population was spread out with 27.0% under the age of 18, 5.1% from 18 to 24, 30.2% from 25 to 44, 23.2% from 45 to 64, and 14.5% who were 65 years of age or older. The median age was 38 years. For every 100 females there were 87.1 males. For every 100 females age 18 and over, there were 84.4 males.

The median income for a household in the village was $55,645, and the median income for a family was $67,833. Males had a median income of $39,123 versus $37,399 for females. The per capita income for the village was $24,394. About 1.2% of families and 2.2% of the population were below the poverty line, including 2.0% of those under age 18 and none of those age 65 or over.