The town was originally called Competition, but the name was changed to Chatham by the Virginia General Assembly on May 1, 1852.

It is the home to the oldest continually used building in Pittsylvania County, once an 18th-century tavern, since turned into a house and now occupied by Chatham Hall faculty.

Virginia has built a new state prison at the site of an old work-release camp; this led to infrastructure upgrades in fire and water services to support the increased population.

Chatham did not see any battle action during the Civil War although it is between Richmond, the capital of the Confederacy, and Danville, which contained Confederate prisons for captured Union soldiers.

On Confederate Memorial Day each year, the local chapter of the United Daughters of the Confederacy places flowers at the statue of a Confederate soldier which is prominent in the front of the historic Pittsylvania County Court House.

There are several bed & breakfast establishments located on Main Street in historic Greek Revival homes.

According to the United States Census Bureau, Chatham has a total area of 2.0 square miles (5.3 km2), all of it land.

[9] The climate in this area is characterized by hot, humid summers and generally mild to cool winters.