According to archaeologist Mary F. Barse, Jefferson was initially laid out in 1774 on a 96-acre (390,000 m2) tract owned by Mrs. Eleanor Medley, which was ultimately called "New Town".

[4] Jefferson's growth in the 19th century was due largely to its location on the main road between Frederick and Harpers Ferry, which is today's Maryland Route 180.

Local history suggests that the name derives from the large number of taverns operating at the time, which were purportedly, on either ends of town.

[4] The Lewis Mill Complex and the George Willard House are National Register of Historic Places properties near Jefferson.

[3] Mar-Lu-Ridge Summer Camp and Education and Conference Center, located on the crest of Catoctin Mountain, 4 miles (6 km) south of Jefferson, has been a main retreat and outdoor ministry site for the Evangelical Lutheran Church in America since 1959.