On June 29, 1660, three settlers living in "Grenege" (now known as Greenwich, Connecticut), Thomas Studwell, John Coe, and Peter Disbrow, purchased Manursing Island (called Menussing by the Indians) from the Mohegan Indians.

A tract of land lying between the Byram River and Blind Brook was sold by the Indians to Peter Disbrow on May 22, 1661.

That year the four men were joined by John Budd, an original settler of Long Island (Southold) and, previously, New Haven.

A neighboring town named Hastings was merged into Rye in the 1660s, no later than 1666, as a 1666 sale of house by John Budd to a George Kniffen of Stratford for 37 pounds, ten shillings, was noted as having been conducted "by agreement of the men of Hastings, now called Rye."

John Budd, who in 1663 was selected by the colonists to be its representative to the government of Connecticut, had purchased a large portion of land west of Blind Brook, an area called Apawquammis by the Indians, for the sum of eighty pounds sterling on November 8, 1661, one of three major land purchases by Budd from the Indians in the area that month.

On October 2, 1668, nine inhabitants of Rye, apparently led by Peter Disbrow, petitioned the governor in Hartford to force Budd to sell some of his holdings to them.

The petition failed, and Budd continued selling tracts to new settlers, as did his descendants.

One such sale, in 1745, of 150 acres (0.61 km2) was from another John Budd, a grandson of the founder, to Peter Jay, father of John Jay, subsequently the president of the Continental Congress, co-author with Alexander Hamilton and James Madison of The Federalist Papers, and Chief Justice of the United States, among other major distinctions.

The town grew and developed Poningo Neck, the current business district of the city of Rye, and finally the Saw Pit area, known today as Port Chester.