The area was originally inhabited by the Wanaruah Aboriginal people who called it Erringhi.

[4] The township is most famous for building and launching the William IV paddle steamer in 1831, although the town was still called Erringhi at this time.

In 1886 the town was described as:The land on the river-banks, consisting chiefly of alluvial flats, is remarkably fertile.

[1][2] Clarence Town has its own post office (built about 1880), Medical Centre (Clarence Town Medical Centre), a Pharmacy, a supermarket (IGA), a primary school, several churches, a school of arts hall (which hosts many local events), a soccer club (home of the Clarencetown Cobras), a football field come cricket pitch, a fire station, police station, butcher shop, club, pub, hardware store and restaurant, a vet, a caravan park on the river and a swimming pool (home of the Clarencetown Comets swimming team).

[9] In 2007 devastating floodwaters caused havoc in the Hunter Valley and claimed the lives of two people on a bridge into Clarence Town from Seaham, New South Wales.