Sandy Hook's story began within a year of Newtown's own founding, when several landowners with property along the Pootatuck River relocated together to reduce their isolation from the main village, settling the area in 1711. The river's flow made it ideal for sawmills and gristmills, providing the timber and grain that helped build the surrounding town, making Sandy Hook one of the first outlying communities settled outside Newtown's center.

The village holds a surprising claim in American industrial history: in 1839, chemist and engineer Charles Goodyear was living just north of Sandy Hook center when he accidentally discovered the process of vulcanization, the breakthrough that made modern rubber production possible.

Over time, Sandy Hook grew into a close-knit community with deep local pride, developing its own distinct identity even while remaining part of Newtown, a character that still defines the village today.