Pelham is the oldest town in Westchester County. Thomas Pell signed a treaty in 1654 with the Siwanoy Indians to buy what is not only the Town of Pelham but is all of the borough of the Bronx and the land along Long Island Sound north to the Rye border and inland to the Bronx river. Pell named his manor "Pelham" in honor of his tutor, Pelham Burton.

Thomas Pell's nephew, Sir John Pell, was the first of the Pells to live in Pelham Manor. He inherited the land in 1670 and until the American Revolution only the Pell family lived in Pelham.

During the American Revolution, the Battle of Pelham was fought along Split Rock Road and Wolf's Lane on October 18, 1776. Despite a fierce fight, the British army commanded by Sir William Howe won the battle.

The Joshua Pell House, built about 1760, is still standing today at 145 Shore Road. Another Pell House, which was remodeled by the Hay family in the 1820s and renamed "Pelhamdale", still stands at 45 Iden Avenue.

The State Legislature incorporated the Town of Pelham on March 7, 1788, and at that time included all of City Island and what is now Pelham Bay Park east of the Hutchinson River. In 1895, the Town of Pelham was reduced to its current area. Three Villages were incorporated within the Town - the Village of Pelham Manor in 1891 and two others, the Village of North Pelham and the Village of Pelham, in 1896. In 1975, the Villages of North Pelham and Pelham (also known as Pelham Heights) merged to form the present Village of Pelham.