With immigrants from the west of Scotland and the north of Ireland, and with many transferring their homes from the eastern and central parts of Virginia, the vicinity of Washington was settled in 1768.

The Pennsylvania legislature passed an act on March 28, 1781, erecting the County of Washington and naming Catfish Camp as the place for holding the first election. This was the first county in the U.S. to bear the name of Washington.

David Hoge laid out a plan of lots immediately after the action of the legislature. His original plot bears the name "Bassett, alias Dandridge Town," but before the plot was recorded, lines were drawn through "Bassett, alias Dandridge Town" with ink, and the word "Washington" was written above.

The town started with every evidence of progressive tendencies, as the original plot dedicated a tract of ground to the people for recreational purposes. A lot was given for a courthouse where the current building now stands, and Lots 43 and 102, according to the plan, were presented by Mr. Hoge to "His Excellency, General Washington, and Mrs. Washington." Part of the townsite had been the camp of Tingoocqua, who was a chief in the Kuskuskee tribe of Indians.

The town was incorporated as a borough on February 13, 1810, and became a city of the third class in 1924.