Long before European colonization, the land that would later become Kennett Square was inhabited by the Lenape people. The Lenape established villages and temporary camps along rivers and creeks throughout southeastern Pennsylvania, where they lived off hunting, fishing, gathering, and farming.
In the early 1680s, the first Europeans settled in the land that became Kennett. The town was originally called Kennet Square, perhaps in recognition of Kennet, Wiltshire, England. "Square" in the name was utilized since the original borough comprised a bit less than a square mile, but later the town expanded.
During the 19th century, Kennett Square was a major station on the Underground Railroad. It was there that Hannah M. Darlington staged a women's convention in 1852. The borough was incorporated in 1855. It was in 1866 that Bayard Taylor wrote 'The Story of Kennett.' Mushroom farming was pioneered in the area in 1885.
Throughout the 20th Century and beyond, Kennett Square grew to become known as the Mushroom Capital of the World, producing over 500 million pounds of mushrooms annually, representing half of the nation's mushroom crop.
Lisa Moore, the manager of Kennett Township, was let go in April 2019 following allegations of her misappropriation of township funds. At the Chester County Common Pleas Court, Moore pleaded guilty and, on October 4, 2021, she was handed a state prison term for siphoning off over $3 million from the people of Kennett Township. The local government had collected $1.7 million as of December 2021. Out of that, $1.27 million was a cash settlement from Moore, $355,000 was from the sale of her house, and $83,000 was taken from her personal account. There is still $1.5 million left to be recovered.