This is where iron ore was first smelted by Abraham Darby using easily mined "coking coal". The coal was drawn from drift mines in the sides of the valley. As it contained far fewer impurities than normal coal, the iron it produced was of a superior quality. Along with many other industrial developments that were going on in other parts of the country, this discovery was a major factor in the growing industrialisation of Britain, which was to become known as the Industrial Revolution. Today, Coalbrookdale is home to the Ironbridge Institute, a partnership between the University of Birmingham and the Ironbridge Gorge Museum Trust offering postgraduate and professional development courses in heritage.
Before the Dissolution of the Monasteries, Madeley and the adjacent Little Wenlock belonged to Much Wenlock Priory. At the Dissolution there was a bloomsmithy called "Caldebroke Smithy". The manor passed about 1572 to John Brooke, who developed coal mining in his manor on a substantial scale. His son Sir Basil Brooke was a significant industrialist, and invested in ironworks elsewhere. It is probable that he also had ironworks at Coalbrookdale, but evidence is lacking. He also acquired an interest in the patent for the cementation process of making steel in about 1615. Though forced to surrender the patent in 1619, he continued making iron and steel until his estate was sequestrated during the Civil War, but the works continued in use.
In 1651, the manor was leased to Francis Wolfe, the clerk of the ironworks, and he and his son operated them as tenant of (or possibly manager for) Brooke's heirs. The surviving old blast furnace contains a cast-iron lintel bearing a date, which is currently painted as 1638, but an archive photograph has been found showing it as 1658. What ironworks existed at Coalbrookdale and from precisely what dates thus remains obscure. By 1688, the ironworks were operated by Lawrence Wellington, but a few years after the furnace was occupied by Shadrach Fox. He renewed the lease in 1696, letting the Great Forge and Plate Forge to Wellington. Some evidence may suggest that Shadrach Fox smelted iron with mineral coal, though this remains controversial. Fox was evidently an iron founder, as he supplied round shot and grenado shells to the Board of Ordnance during the Nine Years War, but not later than April 1703, the furnace blew up. It remained derelict until the arrival of Abraham Darby the Elder in 1709. However the forges remained in use. A brass works was built sometime before 1712 (possibly as early as 1706), but closed in 1714.
In 1709, the first Abraham Darby rebuilt Coalbrookdale Furnace, and used coke as his fuel. His business was that of an ironfounder, making cast-iron pots and other goods, an activity in which he was particularly successful because of his patented foundry method, which enabled him to produce cheaper pots than his rivals. Coalbrookdale has been claimed as the home of the world's first coke-fired blast furnace; this is not strictly correct, but it was the first in Europe to operate successfully for more than a few years.
Darby renewed his lease of the works in 1714, forming a new partnership with John Chamberlain and Thomas Baylies. They built a second furnace in about 1715, which was intended to be followed up with a furnace at Dolgûn near Dolgellau and taking over Vale Royal Furnace in 1718. However, Darby died prematurely in 1717, followed quickly by his widow Mary. The partnership was dissolved before Mary's death, Baylies taking over Vale Royal. After Mary's death, Baylies had difficulty extracting his capital. The works then passed to a company led by his fellow Quaker Thomas Goldney II of Bristol and managed by Richard Ford (also a Quaker). Darby's son Abraham Darby the Younger was brought into the business as an assistant manager when old enough.