Saugus was first settled in 1629. Saugus is a Native American (Algonquin) name believed to mean "great" or "extended". In 1637, the territory known as Saugus (which also contained the present day cities and towns of Swampscott, Nahant, Lynn, Lynnfield, Reading, and Wakefield) was renamed Lin or Lynn, after King's Lynn in Norfolk, England.

In 1646, the Saugus Iron Works, then called Hammersmith, began operations. It was the first integrated iron works in North America as well as one of the most technologically advanced in the world. The Iron Works produced over one ton of iron a day, but was not financially successful. It closed around 1670.

In September 1687, Major Samuel Appleton was said to have given a speech from a rocky cliff near the Iron Works denouncing the tyranny of Colonial Governor Sir Edmund Andros. The place where he is said to have delivered the speech became known as Appleton's Pulpit.

Nearly 100 men from Saugus fought in the American Revolutionary War. Saugus' preacher, Parson Joseph Roby, worked to strengthen the spirit of independence in Saugus and was instrumental in seeing that Saugus sent a large contingent to fight in the war.

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