Occupied for ten thousand years by Native Americans, this land was overseen by clans of the Lenni-Lenape, who farmed, fished, and hunted upon it. They were organized into a matrilineal agricultural and mobile hunting society sustained with fixed, but not permanent, settlements in their clan territories. Villages were established and relocated as the clans farmed new sections of the land when soil fertility lessened and moved among their fishing and hunting grounds.

In 1498, John Cabot explored this portion of the New World. The area was claimed as a part of the Dutch New Netherland province, where active trading in furs took advantage of the natural pass west, but, the Lenape prevented permanent settlement beyond what is now Jersey City.

Although rapid exhaustion of the local beaver population soon turned the Dutch interests much farther north, contention existed between the Dutch and the British over the rights to this land and battles ensued. Passing to the rule of the British in 1664 as the Province of New Jersey, and becoming one of its original thirteen colonies, marks the beginning of permanent European settlements on this land.

In 1680, the British first purchased this Lenape land upon which John Day made the first European settlement in 1710. He chose to settle upon the western bank of the Fishawack Crossing (of the Passaic River) on the traditional Lenape Minisink Trail. The landing at that location was the best place to ford the river and always had been used by the Lenape on their route to the Hudson River and south from their hunting grounds in what is now Sussex County. That traditional part of the Great Trail would become Route 24, leading to Madison, Morristown, Mendham, and Chester, it became known as Main Street in Chatham

Before long, the village became known as John Day's Bridge because of a bridge he built across the river at the shallow landing. By 1750, the village had a blacksmith shop as well as a flour mill, a grist mill, and a lumber mill.

In 1773, the village was renamed to Chatham to honor a member of the British Parliament, William Pitt, the first Earl of Chatham, who was an outspoken advocate of the rights of the colonists in America.

The citizens of Chatham were active participants in the American Revolutionary War and nearby Morristown became the military center of the revolution. Washington twice established his winter headquarters in Morristown and revolutionary troops were active regularly in the entire area. The Lenape assisted the colonists, supplying the revolutionary army with warriors and scouts in exchange for food supplies and the promise of a role at the head of a future native American state. The Treaty of Easton signed by the Lenape and the British in 1766 had required that the Lenape move to Pennsylvania. Wanting to recoup rights lost thereby to the British, the Lenape were the first tribe to enter into a treaty with the emerging government of the United States.

Demographics of

There were 3,159 households out of which 39.4% had children under the age of 18 living with them, 67.6% were married couples living together, 6.4% had a female householder with no husband present, and 24.5% were non-families. 21.3% of all households were made up of individuals and 9.2% had someone living alone who was 65 years of age or older. The average household size was 2.67 and the average family size was 3.14.

The population was spread out with 28.3% under the age of 18, 3.8% from 18 to 24, 33.5% from 25 to 44, 21.4% from 45 to 64, and 13.0% who were 65 years of age or older. The median age was 37 years. For every 100 females there were 91.3 males. For every 100 females age 18 and over, there were 87.0 males.

The median income for a household was $101,991, and the median income for a family was $119,635. Males had a median income of $81,543 versus $59,063 for females. The per capita income was $53,027. About 1.7% of families and 2.2% of the population were below the poverty line, including 1.0% of those under age 18 and 3.3% of those age 65 or over.

New Jersey Transit stops at the Chatham station to provide commuter service on the Morristown Line, with trains heading to the Hoboken Terminal and to Penn Station in Midtown Manhattan.

Bus lines also connect Chatham with the other towns along Route 24 from Newark to Morristown, mostly running parallel to the train lines. Nowadays, buses transport people along the line, but stagecoaches and trolleys were mass transit methods once used along the route that followed Main Street. That section of the old route now is labeled Route 124 because of the widening of Route 24. The destruction of the historic downtown by a proposed widening of the historic route was opposed and after much debate, an alternate route was chosen to preserve the historic downtowns of Chatham and Madison. The last rails for the trolley system were removed from the area roads in the 1950s.