As of the census of 2000, there were 3,759 people, 1,465 households, and 969 families residing in the city. As of 2008, the population was close to 4,200. The population density was 541.9 people per square mile (209.1/km²). There were 1,670 housing units at an average density of 240.7/sq mi (92.9/km²). The racial makeup of the city was 88.06% White, 0.29% Black or African American, 4.97% Native American, 1.73% Asian, 0.37% Pacific Islander, 1.28% from other races, and 3.30% from two or more races. 3.22% of the population were Hispanic or Latino of any race.

There were 1,465 households out of which 39.4% had children under the age of 18 living with them, 48.5% were married couples living together, 13.7% had a female householder with no husband present, and 33.8% were non-families. 29.4% of all households were made up of individuals and 8.7% had someone living alone who was 65 years of age or older. The average household size was 2.53 and the average family size was 3.13.

In the city the population was spread out with 31.5% under the age of 18, 7.4% from 18 to 24, 27.9% from 25 to 44, 23.3% from 45 to 64, and 9.8% who were 65 years of age or older. The median age was 35 years. For every 100 females there were 90.7 males. For every 100 females age 18 and over, there were 82.8 males.

The median income for a household in the city was $48,420, and the median income for a family was $52,372. Males had a median income of $43,162 versus $24,598 for females. The per capita income for the city was $21,740. About 5.8% of families and 6.6% of the population were below the poverty line, including 8.5% of those under age 18 and 2.6% of those age 65 or over.

There are two elementary schools, Soldotna Elementary and Redoubt Elementary. There also is a charter school, Kenai Peninsula Montessori, and a private school, Cook Inlet Academy, k-12, and Skyview and Sohi are the local high schools.

Soldotna is located at 60°29′12″N 151°4′31″W / 60.48667°N 151.07528°W / 60.48667; -151.07528 (60.486617, -151.075373).

Soldotna is located on the banks of the Kenai River on the Kenai Peninsula of Alaska. It is named after nearby Soldotna Creek. There are three explanations of the origin of the word Soldotna: one, that it is derived from soldat, the Russian word for soldier; two, that it is derived from an Athabaskan word for "stream fork" and three, that it is derived from Tseldatna, the Athabaskan name of an herb.

According to the United States Census Bureau, the city has a total area of 7.4 square miles (19.2 km²), of which, 6.9 square miles (18.0 km²) of it is land and 0.5 square miles (1.2 km²) of it (6.34%) is water.

In 1947, after World War II, United States government allowed settling of land on parts of the Kenai Peninsula under the Homestead Act. Veterans of the United States armed services were given a 90-day preference over non-veterans in selecting land and filing for property. Also in that year, the Sterling Highway right-of-way was cleared of trees from Cooper Landing to Kenai. The location of present-day Soldotna was selected as the site for the highway's bridge crossing the Kenai River.

The construction of the Sterling Highway provided a link from the Soldotna area to the outside world. More homesteads were taken and visitors came to fish in the area. The Soldotna post office opened in 1949 and other businesses opened in the next few years.