The southwestern section of New York State is part of a vast section of land claimed by Massachusetts following the Revolutionary War. Robert Morris acquired it in 1791 and, after settlement with the Native Americans in 1797, sold it to the Holland Land Company. Paul Busti, for whom the Town of Busti was named, was born on October 17, 1749 at Milan, Italy, and died in July, 1824, in Philadelphia, Pennsylvania. He was general for the Holland Land Company.

Where many of the original settlers came from or where they originally settled cannot be authentically established. It is known that tribes of both the Erie and Seneca Indians were very early inhabitants of the area. John L. Frank is reported to be the first white settler in 1808 on lot 61, although records indicate that he didn't purchase land until 1812.

The first road opened in the southern part of the county was cut through the forest by Robert Miles between 1802 and 1804 and started by the Conewango at Pine Grove to Shadyside (Lakewood) and ended at a place on Chautauqua Lake known as Miles Landing.

One of the first industries in Busti was a tannery built by John Frank about 1812 at what was called the Frank settlement. The first blacksmith was Patrick Cambell, who operated his shop from the tannery. A short time later, Giles Chipman and Lyman Fargo opened a shop nearby where they installed a trip hammer and manufactured edge tools. Other early industries were established by Deacon Samuel Garfield, Herman Bush, Uriah Haws, Samuel Chappel, James Startwell, and Francis Soule.

Perhaps the most remarkable inhabitants of Busti were the Stonemans. George Stoneman came to Busti in 1810, married Katherine Cheney, and had eight children. His oldest son George became one of the great cavalry leaders of the Civil War. In 1871 he moved to California and became governor of the state years later. Kate Stoneman, another one of George's children, was the first woman to pass the New York State bar exams and to be admitted to law practice in New York State.

The Underground Railroad had one of its most active routes through this region and Busti was an important stop on this route. It crossed the state line at or near Sugar Grove, passed through Busti and Jamestown and then across Lake Erie to Buffalo and on to the "railroad's" terminal in Canada. There was also a station where Sunset Hill Cemetery is now located.

The first school, a one-room log cabin, was built in 1813 and was located at Fairmount and Winch Roads. The log school consisted of one room. Light entered through small windows placed in notches cut in the logs. In the side of the building was a door made of boards and hung with wood hinges. The building was warmed by a huge fireplace while students studied spelling, reading, writing, and arithmetic. The present Southwestern Central School was built and ready for use in 1954.

The Baptist Church of Busti was organized on August 30, 1819. The first Baptist house of worship was built in 1836 and another one was erected in 1853. The first Methodist Episcopal Church was organized under the direction of Rev. Alvin Burgess in about 1819 with approximately 60 members. Churches

Busti also had some firsts in the agricultural field. The first official test on cows in Chautauqua County and one of the first in New York State, was made on the farm of Herbert Ayres. He also raised the first field of alfalfa in the county.