Shelton's story begins in 1639, when English settlers arrived as part of the town of Stratford, in an area then home to the Paugussett people. The community went by several names over the years, Coram, then Ripton, before splitting off from Stratford entirely in 1789 as its own town, named Huntington in honor of Connecticut Governor Samuel Huntington.

Everything changed after the Civil War, when the Ousatonic Water Power Company harnessed the Housatonic River's energy with a new dam and canal system, transforming the riverfront into a booming manufacturing center producing everything from tacks and pins to textiles and pianos. The rapidly growing manufacturing village took the name Shelton in 1882, honoring local industrialist Edward N. Shelton, and the borough incorporated as its own city in 1915, consolidating with the surrounding town of Huntington in 1919 to form the present-day city of Shelton.

Manufacturing remained the backbone of Shelton's economy well into the 20th century, though the city faced a major setback in 1975 when one of the largest arson fires in U.S. history destroyed the Sponge Rubber Products plant, marking the start of a broader industrial decline through the following decades.