During the Revolutionary War, Danbury was an important military supply depot for the Continental Army. Sybil Ludington, 16-year-old daughter of American Colonel Henry Ludington, made a 40-mile ride in the early hours of the night on April 26, 1777, to warn the people of Danbury and her father's forces in Putnam County, New York, of the approach of British regulars. The following day, the British, under Major General William Tryon, burned and sacked Danbury, but fatalities were limited due to Ludington's warning. The central motto on the seal of the City of Danbury is Restituimus, (Latin for "We have restored"), a reference to the rebuilding after the destruction caused by the Loyalist army troops.

Connecticut's largest lake, Candlewood Lake (of which the extreme southern part is in Danbury), was created as a hydroelectric power facility in 1928 by building a dam where Wood Creek and the Rocky River meet near the Housatonic River in New Milford.