The town is near the former site of Canajoharie, an important village of the Mohawk nation that also became known as the Upper Castle.

They dominated the fur trade with the French based in central Quebec, and with Dutch and later English in eastern New York.

Both the French and Dutch married or had unions with Mohawk women, increasing their ties with the people.

Anglo-Europeans began settling in the area c.1737, and the Mohawk gradually adopted certain English customs in their village.

Because the Mohawk and three other Iroquois nations were allied with the British during the Revolutionary War, they were forced to cede most of their lands in New York after the United States' victory.

The town of Canajoharie was consumed by fire twice, causing an ordinance to be passed prohibiting homes to be constructed of wood.

After the Revolutionary War, George Washington visited Canajoharie after surveying the damage to nearby Cherry Valley.

While the Mohawk Valley developed with the completion of the Erie Canal, the project also enabled considerable migration from New York to the Midwest.

Beech-Nut, the baby food producer, was founded in Canajoharie in 1890 during the period of early industrialization in the river valley.

New York State Route 10 is a north–south highway, intersecting the Thruway and NY-5S at Canajoharie village.