The village is named after Dr. Jonas Baldwin, who built a dam across the Seneca River to generate energy and a private canal to keep the integrity of the water highway. It incorporated in 1848 as the Village of Baldwinsville. Prior to this, the community was known by a number of other names, including McHarrie's Rifts.
Baldwinsville initially grew as a local center for a prosperous farming area, with numerous mills along the north and south shores of the Seneca River. A canal on the north shore of the river allowed boats to navigate around the dam. In the early 1900s this canal was superseded with the construction of the New York State Barge Canal on the south shore of the river. In the early 1900s the village was also served by the Erie Lackawanna Railway, connecting Baldwinsville to the cities of Syracuse and Oswego. In addition to agriculture, Baldwinsville had small factories, such as Morris Machine Works, Jardine Bronze Foundry, and others. A large brewery now owned by Anheuser-Busch was constructed immediately east of the village in the mid-1970s to take advantage of ample water supplies from Lake Ontario. As agriculture and industry have receded, Baldwinsville has evolved into an attractive riverside community.