It was one of six townships granted by the Massachusetts General Court to David Marsh and 351 others for their service in the French and Indian War.

Called Plantation Number 5, it was first settled in 1762 by Captain Joseph Wood and John Roundy from Andover, Massachusetts, who built homes on Mill Island at the tidal falls.

On January 30, 1789, the town was incorporated as Blue Hill, named after its commanding summit overlooking the region.

Other products included lumber, masts and roof shingles, but the predominant industry was shipbuilding.

Beginning in 1792, 133 vessels were constructed at Blue Hill, some of them brigs and ships, but most schooners.

[4] A Viking penny was found in 1957 at the nearby prehistoric Goddard archeological site by local amateur archeologist Guy Mellgren.

[1] Located on Blue Hill Bay, the town is drained by Mill Brook.

Blue Hill, elevation 940 feet (290 meters), is the town's highest point.

Long Island, situated in Blue Hill Bay, is part of the town.

It borders the towns of Surry to the northeast, Brooklin to the southeast, Sedgwick to the southwest, and Penobscot to the northwest.