The Lenape named the largest lake in the area Tucseto, meaning either "place of the bear" or "clear flowing water.

The first industry in Tuxedo was the Augusta Forge at the falls on the Ramapo River, founded by Solomon Townsend in 1783, soon after the end of the war.

The southern part of Tuxedo, known as Eagle Valley, was devoted to farming, as were areas just south of Lake Mombasha: Helmsburg and Bramertown were named after early colonial settlers.

The cemetery along Route 17 in Arden was associated with St. Mary's Roman Catholic Church, built in 1867 but later closed due to demographic changes in residents.

By the 1890s, the area iron industry had declined due to the decrease in ore and the discovery of the rich surface beds of the Mesabi Range in Minnesota.

In 1884 he began buying up his siblings' shares in the Augusta tract, with the intention of creating a hunting-and-fishing resort surrounding the 291-acre Tuxedo Lake.

The mammoth development project, laid out by the architect Bruce Price and civil engineer Ernest W. Bowditch, was constructed by some 1,800 Italian and Slovak immigrant laborers in about eighteen months.

"When the Tuxedo Club opened on June 16, 1886, close to 5,000 acres [2,000 ha] had been planned, 30 miles [48 km] of macadam roads had been built, and 40 buildings stood complete.

These were soon joined by a boathouse, a school, a racetrack, a golf course (possibly the second-oldest in the country), indoor tennis courts, a game preserve and breeding ponds, a swimming pool, an electrified toboggan run, 30 miles of bridle paths, and the first water, sewer, and telephone systems outside a major metropolis.

During the first thirty years, more than 250 houses and stables were built in Tuxedo Park, as well as retail stores and service buildings in the so-called hamlet.

Three churches, all still standing (one is used by the Tuxedo Historical Society today), a train station, a library, and a post office were also built, as well as a school and a hospital.

A major shift in landholding in Tuxedo started after 1910, when Mrs. W. A. Harriman gave $1 million and 10,000 acres (4,000 ha) of her family's land to the Palisades Interstate Park Commission.

The Wall Street Crash of 1929 had a disproportionately adverse effect on Tuxedo Park's affluence, as numerous residents lost their financial jobs.

It developed Maple Brook, Laurel Ridge, Clinton Woods and various offices and research centers on its 8,000 acres (3,200 ha) in the Town of Tuxedo.

Non-residential facilities include International Paper's Research Center, the Red Apple Restaurant, and the Sterling Forest Ski Area.

In 1982 the designation was officially presented to Mrs. Joan Richardsson Alleman, Co-Chairman of the Tuxedo Conservation and Taxpayers Association, at the Washington's Headquarters State Historic Site in nearby Newburgh.