North Castle's story traces back to a Siwanoy encampment known as "North Fort," located on the hill where IBM's headquarters now stands, a name early European settlers softened into "North Castle." In 1701, England's King William III granted the land as the Middle and West Patents, and settlers from Massachusetts and Connecticut arrived in the eastern section, while Quakers fleeing persecution from Rye and Long Island settled around what is now Armonk. By 1730 the settlement was well established, formally incorporating on March 7, 1788.

During the Revolutionary War, North Castle was officially considered neutral territory, even as sentiment across the area ran strongly patriotic. The Battle of White Plains reached into town, British spy Major John André was detained here before his role in the Benedict Arnold plot came to light, and General Washington used the Elijah Miller House in North White Plains as his headquarters.

In the early 20th century, construction of the Kensico Dam flooded the valley once home to the village of Kensico, reshaping the landscape permanently. Armonk later became home to one of the region's earliest small country airports, drawing crowds to weekend air shows featuring flyers like Charles Lindbergh, and the legendary Log Cabin nightspot hosted big bands broadcast nationwide.