Although there aren't any official conclusions to the origin of the name, it is believed that the road was part of the property owned by a Mr Alexander, and 'Rednaxela' is an understandable transposition of the English name 'Alexander', since the Chinese language is written right to left. Most of the naming errors in Hong Kong are a result of incorrect or inaccurate translations or transliterations, so some believe the explanation of this unique example of right-to-left transposition error in Hong Kong under colonial bureaucrats inconceivable.

From December 1891 to June 1892, the Filipino revolutionary and national hero José Rizal lived with his family in Number 2 of Rednaxela Terrace, then working as an eye clinician in Hong Kong. The HK government erected a commemorative plaque in 2004 on the intersection of Rednaxela Terrace and Shelley Street to honour Rizal.