[1] Montpelier was chartered in 1781, and was a sleepy rural community when it was named the state capital in 1805, primarily for its geographically central location and access to road and waterways.

Industrial development was enhanced by the arrival of the railroad in 1849, and the town's economy boomed after the American Civil War.

Growth slowed after World War I, with the rise of the automobile and increasing suburbanization.

The North Branch flows south into the west-flowing Winooski River, with the central business district mainly northeast of their confluence.

The central business district is largely characterized by brick buildings built after twof fires swept the area in 1875.