The area was first explored by the ill-fated Popham Colony in September 1607. It was first inhabited by English settlers from the Plymouth Colony in 1628 as a trading post on the Kennebec River. The settlement was known by its Indian name—Cushnoc (or Coussinoc or Koussinoc), meaning "head of the tide." Fur trading was at first profitable, but with Indian uprisings and declining revenues, the Plymouth Colony sold the Kennebec Patent in 1661. Cushnoc would remain unoccupied for the next 75 years. This area was inhabited by the Kennebec Indians, a band of the larger Abenaki tribe. During the 17th century, they were on friendly terms with the English settlers in the region.
A hotbed of Abenaki hostility toward British settlements was located further up the Kennebec at Norridgewock. In 1722, the tribe and its allies attacked Fort Richmond (now Richmond) and destroyed Brunswick. In response, Norridgewock was sacked in 1724 during Dummer's War, when English forces gained tentative control of the Kennebec. During the height of the French and Indian War, a blockhouse named Fort Western (now the oldest wooden fort in America), was built at Cushnoc on the eastern bank of the Kennebec River in 1754. It was intended as a supply depot for Fort Halifax upriver, as well as to protect its own region from French attack. Later, during the American Revolutionary War Benedict Arnold and his 1,100 troops would use Fort Western as a staging area before continuing their journey up the Kennebec to the Battle of Quebec.
Cushnoc was incorporated as part of Hallowell in 1771. Known as "the Fort," it was set off and incorporated by the Massachusetts General Court in February 1797 as Harrington. In August, however, the name changed to Augusta after Augusta Dearborn, daughter of Henry Dearborn. In 1799, it became county seat for newly created Kennebec County. Maine became a state in 1820 and Augusta was designated its capital in 1827 over rival cities Portland, Brunswick and Hallowell. The Maine State Legislature continued meeting in Portland, however, until completion in 1832 of the new Maine State House designed by Charles Bulfinch. Augusta was ranked as a city in 1849. After being named the state capital and the introduction of new industry, the city flourished. In 1840 and 1850, the city ranked among the 100 largest urban populations. The next decade, however, the city was quickly bypassed by rapidly growing metropolises in the Midwest.
Excellent soil provided for agriculture, and water power from streams provided for the industry. In 1837, a dam was built across the Kennebec where the falls drop 15 feet at the head of a tide. By 1838, 10 sawmills were contracted. With the arrival of the Kennebec & Portland Railroad in 1851, Augusta became an even more productive mill town. In 1883, the property of A. & W. Sprague Company was purchased by the Edwards Manufacturing Company, which erected extensive brick mills for manufacturing cotton textiles. In the late 19th century, a paper and pulp plant was constructed. Other Augusta firms produced lumber, sash, doors, window shutters, broom handles, stone cutters' tools, shoes, headstones, ice and furniture. The city developed as a publishing and shipping center. Today, government and post-secondary education are important businesses.
Since the mid-eighteenth century, there has been a military presence in Augusta. Fort Western has not had troops garrisoned there since the 1790s, but in 1828, the U.S. Government built an arsenal to protect their interests from Britain. During the Civil War, Augusta was a rendezvous point for soldiers traveling to the front. Many of the soldiers camped on the green in front of the capitol building. In 1862, Camp E.D. Keyes was established in the northwestern portion of the city. During World War I, Camp Keyes was used as a mobilization and training camp for soldiers. The camp eventually became a headquarters for the Maine National Guard. In 1929, the state legislature approved the placement of the Augusta State Airport next to the camp. As the airport grew, the use of the camp as a training facility was no longer possible. Today, it is still used for administrative and logistical purposes by the National Guard.
In the 19th century, Augusta got a regular steamboat service and the railroad. The city installed gas lights in 1859. A telephone service was available in 1880 and a local hospital in 1898. In the early 20th century, Augusta built two movie houses and a film production studio.