U.S. Route 9W and New York State Route 32 pass through the town, converging at the center of the village and overlapping to the south. These routes parallel the New York State Thruway (Interstate 87), which passes through the town just west of the village.
In the 1650s, Barent Cornelis Volge operated a sawmill on the Sawyer's Kill, supplying lumber for the manor of Rensselaerswick. He had secured a title from the Esopus Sachem to this lands sometime before 1663. Volge likely left the area at the outbreak of the first Esopus War in 1658. The "footpath to Albany" was not laid out until 1670. In April 1677 Governor Edmund Andros purchased land from the Esopus Indian Kaelcop, chief of the Amorgarickakan tribe for the price of a piece of cloth, a blanket, some coarse fiber, a loaf of bread, and a shirt. The Mynderse House was built by John Persen, formerly of Kingston, an early mill owner, around 1685.
In October 1710, 300 families who had immigrated to England from the Palatine region of Germany established camps on the east and west side of the Hudson. The camp on the west side of the river became known as West Camp in the Town of Saugerties. They were sent by the British government to manufacture naval stores for Her Majesty's fleet. The villages at West Camp were called Elizabethtown, Georgetown, and Newtown. Sawmills were established on the Esopus Creek. In 1998 a monument commemorating their arrival was erected on the lawn of St. Paul's Lutheran Church in West Camp.
During the American Revolution, a British Squadron lay anchor at Saugerties from October 18–22, 1777, while raiding parties burned Clermont and Belvedere, across the Hudson River. These were the estates of Margaret Beekman Livingston and her son, Chancellor Livingston. The British also burned sloops near the Esopus Creek, and several homes and barns. While here, British General Vaughan learned of Burgoyne's surrender at Saratoga on October 17. On October 22, 1777, the British fleet left from the Mid-Hudson Valley, never to return.