Allentown was laid out as Northampton Town by William Allen in 1762. Allen was a wealthy shipping merchant, former List of mayors of Philadelphia mayor of the city of Philadelphia and Chief Justice of the Province of Pennsylvania. The property was part of a 5,000-acre plot Allen purchased in 1735 from his business partner Joseph Turner, who was assigned the warrant to the land by Thomas Penn, son of William Penn, in 1732.

Allen hoped that Northampton Town would displace Easton as the seat of Northampton County, Pennsylvania and also become a commercial center due to its location along the Lehigh River and its proximity to Philadelphia. On March 18, 1811, the town was formally incorporated as the Borough of Northampton. On March 6, 1812, Lehigh County was formed from the western half of Northampton County, and Northampton Town was selected as the county seat. The town was officially renamed “Allentown” on April 16, 1838, after years of popular usage. Allentown was formally incorporated as a city on March 12, 1867.

Prior to the 1830s, Allentown was a small town with only local markets. The arrival of the Lehigh Canal greatly expanded the city’s commerce and industrial capacity. The town underwent significant industrialization, ultimately becoming a major center for heavy industry and manufacturing. The Lehigh Canal was built on the east side of the Lehigh River, across from Allentown, although both sides of the river were navigable because of slack water created by Dam 7, later called the Hamilton Street Dam. Boatmen poled their boats across the river above the dam to Lehigh Port, an area along the Lehigh shoreline developed with warehouses and wharves.

With its completion in 1855, the Lehigh Valley Railroad became vital to Allentown’s growth. Built on the west side of the river, opposite the canal, the company’s rail lines passed right through the plants of the Allentown Iron Company (established 1846) and the Allentown Rolling Mills (established 1860), whose products were loaded on-site and taken to markets in the region and beyond.