What is now Nutley was originally incorporated as Franklin Township by an act of the New Jersey Legislature on February 18, 1874, from portions of Belleville Township. Nutley was incorporated as a town on March 5, 1902, replacing Franklin Township. In 1981, the town was one of seven Essex County municipalities to pass a referendum to become a township, joining four municipalities that had already made the change, of what would ultimately be more than a dozen Essex County municipalities to reclassify themselves as townships in order take advantage of federal revenue sharing policies that allocated townships a greater share of government aid to municipalities on a per capita basis.

Nutley derived its name from the estate of the Satterthwaite family, established in 1844, which stretched along the Passaic River and from an artist’s colony in the area.

Nutley grew slowly as Newark developed. The first European settler in the area, recorded in the minutes of a Newark town meeting in 1693, was a Dutch painter named Bastian Van Giesen. His house, known as Vreeland Homestead, still stands today on Chestnut Street and is the location of the Nutley Women’s Club. John Treat and Thomas Stagg purchased lots adjacent to Van Geisen’s in 1695 and 1698 respectively. The Van Riper House is another building from the era. During the revolutionary war, the Continental Army, under the command of General George Washington, retreated from New York through Essex County and what is now Nutley.

The first brownstone quarry in Nutley is believed to have been in operation by the early 18th century and was the town’s first major industry. Jobs at the brownstone quarry in the Avondale section of Nutley provided work for many Italian and Irish immigrants. Mills situated along the Third River in the area now known as Memorial Park I became Nutley’s second major industry.

John and Thomas Speer, Joseph Kingsland, and Henry Duncan all operated mills in the town during the 1800s. Current streets in Nutley are named after these mill owners. Henry Duncan built several mills throughout the town and established the village of Franklinville consisting of 30 homes and a few small businesses which later became the center of Nutley. One of Duncan’s buildings has been modified and now serves as the town hall. Kingsland Manor is a national historic place.

During the late 1880s, painter Frank Fowler founded an artists’ colony on The Enclosure, a dead-end street that is near the Third River, a stream that runs through the town’s parks. Later artist residents of the street included Frederick Dana Marsh, Reginald Marsh and muralist Michael Lenson.