When America declared its independence from Great Britain in 1776, Sharptown was little more than a hamlet on the southern bank of the Nanticoke River. Although 32 miles from the river's mouth, this was the first high and dry spot on the south bank. The discovery of thousands of spears and arrowheads in the area indicate that it was inhabited by Indians at some time. Sources indicate that it was a recognized settlement by about 1769.

In the early 1800s, Sharptown's growing prosperity attracted new settlers. Matthew Marine and his family were among them. Matthew's grandfather had lived in Somerset County in 1736 but later moved to Dorchester County. It was from there that Matthew and his wife, Nancy Rawlings, came to Sharptown around 1818. (The family was of French Huguenot stock, spelling the name Merine or Merin in the 1600s.) As the founder of the Sharptown Marine Railway Company, Matthew owned the largest fleet of schooners of any one person on the Nanticoke. Some of the better known ships built by the company between 1865 and 1893 included the Martha Ellen, Nettie R. Evans, James H. Hargrave, and John W. Elliott. By the end of the 19th century, eighteen sailing vessels registered as U.S. merchant ships had been built in Sharptown.

Religion always played an important role in the lives of Sharptown's citizens. The traveling distance to a Methodist Episcopal church built outside the town in 1832 tended to discourage regular attendance. So, in 1876, a new church was constructed on a half-acre site on Main Street. That church is known today as Asbury United Methodist Church. The Methodist Protestant Church in nearby Portsville, Delaware, sponsored services in the homes of Sharptown families until they were able to build their own Harmony Methodist Protestant Church in 1845. Forty years later, the members of the church, under the leadership of Rev. G. R. McCready, built a new church on the corner of Railway Street and Church Street.

By 1877, Sharptown could boast of four dry goods stores. The Marvil Package Company manufactured fruit crates and baskets, wood and iron turnings, desk plugs, and trunnel wedges. There was a blacksmith/shipsmith shop, ship's carpenter shops, and a sailmaker shop. One Wesley Clarkson did a thriving business in groceries and whiskey by the wharf. The Sharptown Marine Railway Company was still in operation, then owned by R. M. Elzey and Brothers. There were two justices of the peace, a doctor, and an officer of registration for elections.

Sharptown's municipal history reflects an early ambivalence among the citizenry toward the subject of incorporation. The town was first incorporated in 1874, but that action was repealed in 1880. Eight years later, incorporation was in favor again, and a measure identical to that of 1874 was enacted. That entire charter was repealed again in 1912 but only to be re-enacted later in the same year. Today, Sharptown remains an incorporated community with approximately 600 residents.

Sharptown enjoys a beautiful area on the Nanticoke River called Cherry Beach. The property was given to the town by A. W. and Ida Robinson to be used for no purpose other than public recreation. The beach has picnic tables, a children's play area, a softball field, facilities for privately owned boats, and a pavilion for special events.