Port Chester's story begins in 1660, when English settlers Thomas Studwell, John Coe, and Peter Disbrow, arriving from Greenwich, Connecticut, purchased Manursing Island and the surrounding land along the Byram River from the local Native population. In a detail shared with several of its Westchester neighbors, this land was originally considered part of Fairfield County, Connecticut, before the New York-Connecticut border was permanently settled decades later.

The settlement became known as Saw Pit around 1732, named for the ground-level pits used to saw felled logs into planks for shipbuilding. During the Revolutionary War, the village's position on the Byram River made it a contested military outpost, fought over by both British and American forces. In 1837, residents renamed the growing village Port Chester, after Chester, England, the birthplace of many early settlers, and on May 14, 1868, the New York State Legislature granted Port Chester its official village charter, with a population of about 3,500 residents, six churches, two banks, and its own railroad station.

Industry quickly took hold. The Eagle Iron and Stove Works became one of the largest manufacturers in the village through the late 1800s, and steamboat and later trolley service connected Port Chester to New York City and beyond. That growth accelerated further with the 1926 opening of the Capitol Theatre, a grand vaudeville playhouse that would later become one of the most legendary rock concert venues in American music history.