The settlements that make up today's Cobourg were founded by Loyalists in 1798. Cobourg was originally a group of smaller villages, such as Amherst and Hardscrabble, which were later named Hamilton. In 1808 it became the district town for the Newcastle District. It was renamed Cobourg in 1818, in recognition of the marriage of Princess Charlotte Augusta of Wales to Prince Leopold of Saxe-Coburg-Saalfeld.
By the 1830s Cobourg had become a regional centre, largely due to its harbour on Lake Ontario. On July 1, 1837, Cobourg was officially incorporated as a town. Standing at the heart of the downtown is Victoria Hall, a building that now serves as the town hall, as well as home of the Art Gallery of Northumberland, and the Cobourg Concert Hall. Victoria Hall was officially opened in 1860 by the Prince of Wales, who later became King Edward VII.
At that time, Cobourg was a significant town in the Province of Canada, and some residents believed that Cobourg would be a suitable capital for the newly united provinces, however Ottawa was selected as the capital. In the late 19th century and early 20th century, wealthy Americans built enormous summer homes there, a few of which still stand today.
A major ferry service connected Cobourg and Rochester, New York from 1907 to 1952, transporting passengers and cargo across Lake Ontario, allowing Americans to reach the town more readily. The Cobourg and Peterborough Railway ran northward over Rice Lake to Peterborough, but the lines collapsed into Rice Lake in the late 1800s. After World War II as transportation technology improved, this economic link decreased in importance.
Throughout the late 1980s and early 1990s, the town invested heavily in purchasing property along the waterfront and beautifying the area. A boardwalk was developed to connect the harbour and large sandy beach while further pathways were created to encompass Victoria Park and the historic downtown.