The town of Dundas was named by John Graves Simcoe, Lieutenant Governor of Upper Canada, for his friend Henry Dundas, 1st Viscount Melville, a Scottish lawyer and politician who never visited North America. Prior to being called "Dundas" the town was called Coote's Paradise, and renamed after 1814 to Dundas. Dundas was then incorporated in 1847 as part of Wentworth County.
The Great Western Railway (GWR) put their line through Dundas in 1853, but it wasn't until 1864 that the first Dundas station was built.
In the late 18th and early 19th centuries, Dundas enjoyed considerable economic prosperity through its access to Lake Ontario via the Desjardins Canal, and was an important town in Upper Canada and Canada West. It was later surpassed as the economic powerhouse of the area by Hamilton, but for decades it led in importance. A number of Ontario cities (including Toronto) retain streets named Dundas Street, which serve as evidence of its onetime importance. Dundas was once the terminus of Toronto's Dundas Street (also known as Highway 5), one of the earliest routes used by Ontario's first settlers.
With the establishment of McMaster University in nearby west Hamilton in 1930, Dundas gradually became a bedroom community of the university faculty and students, with a thriving arts community. Dundas has a large community of potters and several studio shows/walking tours of the town feature their work each year.
On March 1, 1976 Town Council proclaimed Dundas "The Cactus Capital of Canada." This gave rise to the Cactus Festival as the Chamber of Commerce and the Dundas Jaycees were looking to create a summer festival with a strong theme.