The Sauk, Meskwaki, Potawatomi, and Ho-Chunk peoples had members in the area when settlers arrived.

The region about the Yahara River was called Gishkzhegonang (Catfish Place) by the Potawatomi peoples, and was transcribed into English as "Koshkonong."

Under the government of the Wisconsin Territory, the town was originally named Finch in 1839, but was renamed Koshkonong in 1842.

[4] In 1840, Norwegian families from Telemark settled near Lake Muskego in Waukesha County.

In 1841, what would become for a time the largest Norwegian-American community in America was founded at Koshkonong in eastern Dane and western Jefferson counties.

[9] The southeast shore of Lake Koshkonong forms part of the western border of the town.

U.S. Route 12 crosses the town from southeast to northwest, passing through Fort Atkinson.