In the 1650s Barent Cornelis Volge operated a sawmill on the Sawyer's Kill, supplying lumber for the manor of Rensselaerwick. He had secured a title from the Esopus tribe Sachem to this lands sometime before 1663. The name Saugerties derives from "Zagertje" which means "Little Sawyer" in Dutch.
Around 1685 George Meals and Richard Hayes purchased land on both sides of the Esopus Creek where it enters the Hudson River. Within two years, they sold the riverfront land to Barent Burhans, a miller whose granddaughter's husband, John Brink Jr., established a ferry across the river to Clermont, the seat of the Lower Livingston Manor.
John Persen was an early mill owner. He had both a sawmill and a gristmill; he also operated a ferry crossing the Hudson River to the east shore. He built the Mynderse House around 1685.
During the American Revolution, a British naval squadron lay at anchor at Saugerties from October 18–22, 1777, while raiding parties burned the Livingston estates of Clermont and Belvedere, across the Hudson River. Some of Benjamin Snyder's sloops were burned in Saugerties harbor as well.
The village was incorporated in 1831 as "Ulster," but it changed its name to "Saugerties" in 1855.