[5] It is the westernmost incorporated municipality in Cecil County, as well as in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metropolitan Statistical Area, better known as the Delaware Valley.

The first recorded European visits to the area were the 1608 and 1609 expeditions led by Captain John Smith up the Chesapeake Bay.

He sailed about 2 miles (3.2 km) up the Susquehanna River to the present location of Port Deposit, and gave the name of "Smythe Fayles" to the rapids just above the future town.

In the same year, in the jurisdiction south of the river, a petition was submitted for a road from the mill at 'Rock Run'[9] to Peach Bottom, Pennsylvania.

River barges and wagons loaded with lumber, grain, coal, whiskey, tobacco, and other goods floated downriver to this "port of deposit", where cargo could be transferred to ships from the Chesapeake.

"[11][12][10][13] As early as the 1790s, the forests on the Susquehanna were being logged and the timbers floated downriver to points near the ferry landing.

Until the canal was placed in service bypassing Smith's Falls, most of the traffic stopped at Lapidum, across the Susquehanna River since it was easier to run the rapids on the south side.

After completing a survey in 1813, which included the first written reference to Port Deposit, the company proposed a location that complied with the law but was longer than necessary.

[10] A 4 acres (16,000 m2) site at the north end of Port Deposit was committed to quarrying "granite."

[12] In 1832, the governments of Maryland, Delaware, and Pennsylvania chartered a quartet of railroads to connect Baltimore and Philadelphia.

The Maryland General Assembly chartered two railroads terminating at Port Deposit: the Baltimore and Port Deposite Rail Road Company to build a line from the Susquehanna's western bank to Baltimore; and the Delaware and Maryland Rail Road Company to build from the river's eastern bank to the Delaware state line.

[10][13] Jacob Tome arrived in Port Deposit penniless; became a banker, philanthropist, and politician; and died one of the richest men in the United States.

When he died on March 16, 1898, in Port Deposit, he left a substantial endowment for the institute, which the Tome School tapped to build a series of beaux arts granite buildings on the bluffs above Port Deposit, overlooking the Susquehanna River.

[13] The CP-TOME interlocking on the railroad line through downtown Port Deposit is named in his honor.

This characteristic, which had long been good for Port Deposit, also attracted power companies in the boom period after World War I.

The Conowingo Dam, built in 1927, permanently changed the character of the town by terminating all river traffic and decimating what was left of the shad and herring fishery which was once found there.

Formerly a major industry in Port Deposit, Wiley's Manufacturing, fabricated the Fort McHenry Tunnel sections.

[12] The immersed tubes of the 63rd Street Tunnel were fabricated at a shipyard in Port Deposit and then towed to New York City.

[13] During the second half of the twentieth century, Port Deposit maintained a small police department, mostly made up of parttime officers.

He had joined the force in the early 1960s, and with the command appointment he became the first African American police chief in Cecil County.