Egremont was first settled in 1722 by Dutch settlers from New York. English settlers arrived a few years later, and the town was officially incorporated by Massachusetts in 1761. It is unclear whether the town is named for the English town or for the first Earl of Egremont, whose title was created shortly after Egremont's settlement. For much of its history, Egremont has been an agricultural town, with only a small milling area around South Egremont.

Around New Year's Day, 1776, General Henry Knox passed through the town with cannons from Fort Ticonderoga, which he was bringing to help end the Siege of Boston. Today, the path is known as the Knox Trail, and a historical marker is located in the village of North Egremont.

According to the United States Census Bureau, the town has a total area of 18.9 square miles (49.0 km²), of which 18.7 square miles (48.4 km²) is land and 0.23 square miles (0.6 km²), or 1.26%, is water. Egremont lies along the western border of Berkshire County and Massachusetts, with Columbia County, New York, to the west. The town is bordered by Alford to the north, Great Barrington to the east, Sheffield to the southeast, Mount Washington to the southwest, and Copake and Hillsdale, New York, to the west. Egremont is 23 miles (37 km) south-southwest of Pittsfield, 50 miles (80 km) west of Springfield, 140 miles (230 km) west of Boston, and 48 miles (77 km) southeast of Albany, New York.

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