In the Middle Ages, Barrow was a small hamlet within the Parish of Dalton-in-Furness with Furness Abbey, now on the outskirts of the modern-day town, controlling the local economy before its dissolution in 1537. The iron prospector Henry Schneider arrived in Furness in 1839 and, with other investors, opened the Furness Railway in 1846 to transport iron ore and slate from local mines to the coast. Further hematite deposits were discovered, of sufficient size to develop factories for smelting and exporting steel. By the late 19th century, the Barrow Hematite Steel Company-owned steelworks was the world's largest.
Barrow's location and the availability of steel allowed the town to develop into a significant producer of naval vessels, a shift that was accelerated during World War I and the local yard's specialisation in submarines. The original iron- and steel-making enterprises closed down after World War II, leaving Vickers shipyard as Barrow's main industry and employer. Several Royal Navyflagships, the vast majority of its nuclear submarines as well as numerous other naval vessels, ocean liners and oil tankers have been manufactured at the facility.
The end of the Cold War and subsequent decrease in military spending saw high unemployment in the town through lack of contracts; despite this, the BAE Systems shipyard remains operational as the UK's largest by workforce and is undergoing a major expansion associated with the Dreadnought-class submarine programme. Today Barrow is a hub for energy generation and handling. Offshore wind farms form one of the highest concentrations of turbines in the world.
The name was originally that of an island, Barrai, which can be traced back to 1190. This was later renamed Old Barrow, recorded as Oldebarrey in 1537, and Old Barrow Insula and Barrohead in 1577. The island was then joined to the mainland and the town took its name. The name itself seems to mean "island with promontory", combining British barro- and Old Norse ey, but it is more likely that Scandinavian settlers simply accepted barro- as a meaningless name, and so added an explanatory Old Norse second element.
In the late 19th and early 20th centuries, Barrow was nicknamed "the English Chicago" because of the sudden and rapid growth in its industry, economic stature and overall size. More recently the town has been dubbed the "capital of blue-collar Britain" by the Daily Telegraph, reflecting its strong working class identity. Barrow is also often jokingly referred to as being at the end of the longest cul-de-sac in the country because of its isolated location at the tip of the Furness peninsula.