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Whately was first settled in 1672 as a northern section of Hatfield.
The town peaceably petitioned for separation from the town because of its relatively long distance from the rest of Hatfield, and was officially incorporated in 1771, named by Governor Thomas Hutchinson for Thomas Whately, a Member of Parliament whose letter to Hutchinson would later be involved in the controversy which brought on Hutchinson's dismissal.
Whately was the site of the state's first gin distillery, as well as other small mills, including wool and furniture mills.
The town also used the water in town for agricultural pursuits, including dairying and one of the few Sumatran tobacco fields outside of Indonesia.

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