The village later to be called Ayr, on the Nith River, was originally a group of settlements, Mudge's Mills in the centre, Jedburgh to the east and Nithvale to the west, that eventually combined into one as they expanded.

The territory in this area, eventually to be the township of North Dumfries, consisting of 94,305 acres, had been sold to Philip Stedman in 1798 from Joseph Brant of the Six Nations.

The Smith's Canadian Gazetteer of 1846 describes Ayr, population 230, as containing two churches, a post office receiving mail once a week and businesses such as a grist mill, fulling mill and carding machine, a tannery, two stores, a blacksmith, two shoemakers, two tailors, one cooper and two carpenters.

In 1849, the John Watson Manufacturing Company (later Ayr Machinery Works) was already making threshing, mowing, reaping and other farm implements.

[3] By 1854, the village had a small library, two school houses, a fire company, a newspaper and a single (Presbyterian) church.

The population was 1000, there were five churches, a fire company, a weekly newspaper and a large school with students from primary to senior level.

[3] The village got a rail line from the Credit Valley Railway in 1879, which helped facilitate the importing and exporting of goods.

Jedburg and Nithvale were absorbed into Ayr in 1884 when the village was incorporated, with foundry owner John Watson as the first Reeve.

[2] On the morning of August 17th 2024, the town was hit by a EF2 tornado that damaged multiple homes, buildings, businesses, vehicles, as well as overturning rail cars.