Although humans have lived near the Occoquan River for thousands of years, Captain John Smith was the first European known to have visited the area, exploring the river's mouth in 1608. There he encountered a group of American Indians later known to Europeans as the Dogue. While tradition holds that Occoquan means "at the end of the water" in the language of the Dogue, more recent linguistic analysis suggests it may have simply meant "a grove of trees."
After Smith's visit, more than a hundred years passed before Europeans substantively settled the area. Public tobacco warehouses sprouted on the river's banks in the 1730s, and in the 1750s John Ballendine built Rockledge Manson and established an iron manufacturing complex near the river's falls. Reacting to changing economic conditions, by the end of the 18th century Ballendine's successors had converted the iron manufacturing complex to milling operations. The town's main or Merchants' Mill is believed to have been one of the first automated mills in the young United States of America, and continued in operation until 1924.
The Quaker Nathaniel Ellicott was among the most notable of Occoquan's early residents. In addition to purchasing the mill complex and Rockledge Mansion, he also built the town's first bridge, provided part of the land on which the town was chartered in 1804, and later constructed a toll road that eventually put the town on the East Coast's main north-south route, a position it was to retain until the coming of Route 1 in the 1920s.
Home to a number of vocal Abraham Lincoln supporters, Occoquan was also the site of several small engagements during the Civil War, the most notable of which were two Confederate cavalry raids in December of 1862. Troops from both sides occupied the town at different times during the conflict.
For most of its history economic activity in Occoquan has centered on the river. In addition to iron manufacturing and milling, at one time or another rock quarrying, the lumber trade, river-ice supply, shipbuilding, and excursion boating, have all figured prominently in Occoquan commercial life. In 1916, a hotel fire devastated much of the town. But residents rebuilt, and for part of the 20th century Occoquan bustled with grocery, lumber, and hardware stores; doctors' offices, a pharmacy, a bank, a funeral home, churches, and a school.
A disaster of a different sort occurred in 1972, when Hurricane Agnes struck. Dumping more than 16 inches of rain in 36 hours, Agnes destroying buildings, buckled streets, and wiped away the iron-truss bridge across the Occoquan that had stood since 1878. As with the fire of 1916, however, the people of Occoquan rebuilt, ultimately transforming the town into the charming mix of old and new that is on display today.