The town is named after Catherine Pauling, the daughter of Henry Beekman, who held the second largest land patent in the county.

A section of the town, located in the "Oblong"—the name was given to the disputed oblong strip of land, two miles in width forming part of the Eastern boundary of the now Dutchess and Putnam Counties—was settled by Nathan Birdsall and his wife Jane Langdon; they were the first pioneer settlers of Quaker Hill, Dutchess, NY.

Nathan purchased his land from the Great Nine Partners Patent, prior to moving his family there, erected a log house and barn, probably around 1720.

It was not until 1731, when the one-hundred-year-old dispute as to the boundary between the English in New England and the Dutch in New York was settled, that emigration started in any volume.

A number of Friends began coming from Harrisons Purchase, now a part of Rye, in Westchester County, New York.

In the American Revolution colonial commander in chief George Washington established his headquarters at the John Kane House in the town (now the village) for two months in 1778.

The eastern and western section of the towns are high and hilly, with the Great Swamp and Harlem Valley in the middle, where the village of Pawling is located.

The PFD operates a varied fire apparatus fleet, however does not provide Emergency Medical Services.

In the event of numerous calls within a short amount of time, ambulances are pulled from neighboring towns including Beekman, Dover and Patterson or, if a backfill unit is available, it will respond from nearby.

Sheriff's deputies have a substation located in the middle of the hamlet, near the train station.

Pawling has several free standing doctors' offices and clinics, including Village Medical and The Atrium.