It was originally a tavern stop about half-way on the old cart road that extends across the peninsula between Appoquinimink Creek in Odessa and Bohemia Landing on the eastern branch of the Bohemia River in Maryland--thus the name "Middletown."

Middletown was incorporated on February 12, 1861, and the first town council decided the town should be one mile square, commencing at the corner of the crossroads and extending one-half mile in each direction. Thus it was known as the "Diamond Town of the Diamond State." As the town has grown, its boundaries have extended in each direction.

The 1989 film Dead Poets Society, which stars Robin Williams as unorthodox English teacher John Keating, was filmed almost entirely on the school grounds at St. Andrew's School in Middletown. The theatre scene was filmed at The Everett Theatre on Main Street.

The Middletown Olde-Tyme Peach Festival includes activities for children, a local artist exhibit, historical exhibits, a pie contest, crafts, music, food, games, and of course--lots of peaches!

In 1675, Adam Peterson took on warrants for the land which later became the town of Middletown, the first survey being made in 1678. Later, his widow married David Witherspoon, a native of Londonderry, Ireland, and they settled upon the King's Highway at the crossroads, first known as Mrs. Blackston's Corner.

The Middletown Transcript is the main publication for the Middletown, Odessa and Townsend area. The first edition was printed on January 4, 1868.

The monument at Cochran Square, also known as "Four Corners" at the center of town, was dedicated on November 11, 1919. It was originally intended to honor four servicemen who died in World War I, but today it honors all war heroes.

According to legend, a local slave enjoyed playing the fiddle back in the mid-1800s. After he incurred a severe beating, however, he was never quite the same. He escaped, living the rest of his life as a recluse in the woods, though he was sometimes seen playing mournful tunes on his fiddle on the bridge that spanned Scott's Run. One night, he drowned there, but according to locals he still haunts the area now known as Fiddler's Bridge, and some say that if you throw a dime into the water, the ghostly fiddler will serenade you.

Known as one of the oldest structures in Middletown, Dogtown Hot Dogs first served as a farmhouse in the 1800s. According to records, a businessman by the name of Richard Lockwood acquired the property in 1837 and turned it into a store. Over time, the building has also been a pharmacy operated under various names. After the building was gutted in the 1960s, only the outside walls remained. In 2011, Chris Gormley bought the property and opened a restaurant specializing in a favorite old-time American food--the hot dog.

The Middletown Police Department was officially established on July 2, 2007. It began with a foundation of 20 officers from surrounding Delaware police departments.