French explorer Étienne Brûlé was probably the first European to visit the area, meeting with the Susquehannocks and travelling down the Susquehanna River in 1615.

John Shepard was one of the more prominent early white settlers, buying 1,000 acres (400 ha), including all of what would become Waverly, and building a mill on the banks of Cayuta Creek in 1796.

This also helped spur the economic development of Waverly's southern neighbor Sayre, Pennsylvania, home to Lehigh Valley Railroad's locomotive yard and shops.

Robert Heysham Sayre, president of the Pennsylvania and New York Railroad, helped cement the deal.

The town would become famous for its extensive rail yard (still appreciably large today at half the peak size) and more famous for the railroad repair shops and steam locomotive repair and manufacturing shops situated in the town, which employed thousands.

The railroad founded as a coal rail road in 1855 to connect the Coal Region operated through traffic up the Susquehanna to Elmira and points north and west from 1870 until 1976, but maintenance facilities were shifted away before that with the switch away from anthracite steam locomotives to diesels post-World War II.

Others are the Food and Drug Research Laboratories, the State Line Auto Auction and O’Brien's Inn, known for its scenic view of the Chemung Valley.

Grace Episcopal Church, the United States Post Office, Waverly Village Hall, and former Mary W. Muldoon High School are listed on the National Register of Historic Places.

Together, these small towns make up the greater area known as the Penn-York Valley, which includes locations in both New York and Pennsylvania.

Waverly is so close to New York state's southern border that the village is part of a much larger community that runs into Bradford County, Pennsylvania.

It is within the Waverly Central School District..[13] The following primary and secondary schools comprise the Waverly Central School District: SRAC (Susquehanna River Archeological Center) The archaeological center opened in 2008 dedicated to education, research and preservation of the region's Native American archaeological, cultural and historical assets for the communities within the Twin Tiers Region of Southeastern NY and Northeastern PA.

In addition, the northern terminus for U.S. Route 220 is at NY 17C (Chemung Street) in the west end of the village along the state border.

[15] BeST Transit service makes stops in the Penn-York Valley and Bradford County, Pennsylvania as well as the Lycoming Mall.

The Waverly School District also has football, baseball, basketball, bowling, golf, tennis, soccer, wrestling, track, and cross country, teams.

Directly south of the park, I86 (Rte 17) briefly enters Pennsylvania before re-entering New York State.

In 2006, the horse racing track at Tioga Downs in neighboring Nichols NY, was expanded to include a Racino with the addition of casino facilities.

State funding was secured for this facility, including $1,000,000 for the construction of a waste water treatment plant.

[25] A large portion of the former Snyder Hotel building in downtown Waverly collapsed during a severe weather storm in the summer of 2007, requiring emergency efforts to clear fallen bricks, wood and other building products and restore the safety of downtown operations.

Waverly sought financial assistance under the state's Restore New York funding program, but was unable to secure any.

A tax increase referendum conducted December 11, 2008, resulted in voter approval to secure financing for what has subsequently led to the purchase and relocation of all village municipal services to the former Ithaca Street School, after outgrowing the available space at the historic Waverly Village Hall.