Millsboro's earliest European settlers were of English family origin; though most were second generation colonists who simply migrated north from the eastern shore of Virginia in order to join in the timber drive of the later 17th century, which brought many seeking to cut the vast mixed deciduous forests.

The settlement itself was created in the second half of the 17th century when settlers from Accomack County, Virginia arrived to cut timber along the drainages.

The township during the first settlement period, although unincorporated, had several stores, churches, a bakery and various tack and blacksmith shops as well as and both Anglican and Presbyterian congregations.

[citation needed] A second period of settlement occurred after Elisha Dickerson built a dam on the Indian River in the 1792.

[3] Prior to the American Revolutionary War, the present-day Town of Millsboro was in the Province of Maryland (Somerset and, later, Worcester County).

Ball Theatre, The Robert Davis Farmhouse, Harmon School, Isaac Harmon Farmhouse, Harmony Church, Ames Hitchens Chicken Farm, Indian Mission Church, Indian Mission School, Indian River Archeological Complex, Johnson School, Perry-Shockley House, Warren's Mill, and Warren T. Wright Farmhouse Site at and near Millsboro are listed on the National Register of Historic Places.

In 2020, Millsboro was ranked 2nd out of the 57 Delaware cities for number of residential building permits issued.

[8] In 2021, PC Magazine named Millsboro one of the top 50 cities in the United States and Canada for remote work.