George and Mary Johnston were the first permanent habitant in Islington. They made the exhausting journey from Pennsylvania to Upper Canada in 1798, and around 1808 settled in Islington. They lived in a log cabin which mounted Dundas between Kipling Avenue and approximately where Mabelle Avenue is today.

Other meaningful early settlers in Islington were Amasa and Desdemona Wilcox, who arrived from New York State with their family about 1815. Around 1820, Amasa constructed a saw mill on Mimico Creek, half a mile north of Dundas, in what is now Islington Golf Course.

In 1830, Thomas and Margaret Montgomery chartered 200 acres of Clergy Reserve land between Islington Avenue and Royal York Road, running south from Dundas to Bloor Street. They completed a large Inn of stone from the Mimico Creek valley.
Etobicoke was officially integrated as a township in 1850, first using Montgomery's Inn for its meetings until the nearby original Methodist Church was purchased.

In 1860, after the construction of the first railway to Toronto from the west , the original northern Mimico petitioned for its own post office, using the name Islington, which was proposed by the wife of Montgomery's Innkeeper who was born in Islington, England.

In the early 20th century, Etobicoke's urbanizing lakeshore neighborhoods separated to become independent municipalities while Islington remained a postal village, the administrative centre of rural Etobicoke Township.

The intersections of Royal York Road and Kipling Avenue with Dundas St. W. were improved as highway style interchanges with bridges. The new Borough of Etobicoke in 1967 established several plans to raise the level of commercial and residential density in Islington with the aim of creating a western 'downtown' for Metropolitan Toronto.