The area that came to be known as the Village of Waterford and surrounding Town of Waterford was ceded to the U.S. government by the Potowatomi tribe in 1833. The first Americans to settle were Samuel E. Chapman and Levi Barnes in 1836. A part of Rochester, it was separated in 1847,
Chapman started the first manufacturing business, a sawmill, near the Waterford Dam, shortly after settling in the village. The next year he built a mill with two stones, one for milling flour and the second for feed. 

Waterford: Stories of Our Village and its Busy Life from the library of the University of Wisconsin Digital Collection