The town was named after William Sprague III, who laid out the industrial section.

Senator William Sprague III of Rhode Island had laid out plans to build "the largest mill on the Western Continent" in eastern Connecticut, only to die later that year.

[5] The mill village of Baltic sat on the Shetucket River in the southwest corner of the town.

The previous industry in town was the Baltic Textile Mill, which burned down in 1999.

Sprague is quickly becoming a destination for eco-tourism, having held their first RiverFest, a celebration of the local Shetucket River.

The river and festival attract kayakers, canoe enthusiasts, tubers, and nature lovers.