It takes its name from the large number of mills (mostly gristmills and sawmills) located along it during the 18th and early 19th centuries.

It originates a short distance over the state line near Kaolin, Pennsylvania and flows east, then south into Delaware.

Leaving Hockessin, the stream turns slightly to the west, and then sharply towards the southeast to flow through a deep, wooded gorge between suburban developments.

Further down the gorge, Mill Creek passes through Limestone Hills Park, and then forms the western boundary of the DelCastle Recreation Area.

Below Kirkwood Highway, the valley begins to open, and the creek skirts Delaware Park and passes under the Wilmington and Christiana Turnpike just before it empties into the White Clay.