Albany was laid out in about 1832. It was incorporated as a village in 1842.
The small rural village became one of several stops in Athens County for the Underground Railroad, as fugitives could come upriver on the Hocking River from the Ohio River. Free blacks, many of whom had migrated from the Upper South, settled the village in the mid-19th century.
The black population increased during the 1850s from four in the township to 174 by 1860, largely because of the chance for their children to attend the Albany Manual Labor Academy, which was open to both genders and all races. The outbreak of the Civil War caused the academy to lose students and close. It was bought by the Christian Church in 1862, which established Franklin College at the site and excluded blacks.
To ensure the education of their children, African Americans from the county and state quickly founded the private Albany Enterprise Academy, the first school in Athens County for African Americans. It operated until 1886. Founders included leaders of the black community, such as Thomas Jefferson Furguson (co-founder of the Ohio Colored Teacher's Association, member of the Albany City Council and the first black to serve on a jury in Athens County); Cornelius Berry (father of Edward Berry of the Berry Hotel); Philip Clay, David Norman, Woodrow Wiley and Jackson Wiley. A two-story building was constructed and the school opened in 1864, with 49 students already enrolled.
In 1864, the board advertised their academy in a broadsheet, saying:
"The School will be owned and managed by colored persons; but this does not in our opinion make an argument against it. "The day has gone by for the colored man to be used as a mere machine. He must now reflect the light of his own intellectual and moral development, must either shine in the effulgence of his own wisdom, or sink to poverty and wretchedness by his own ignorance."
The Enterprise Academy had in "excess of one hundred students" in its early years of operation (for comparison, about the same number then enrolled at Ohio University) at the same time). With the increase in students, a second building for a girl's dormitory was built in 1870. But, by the late 1870s, when many blacks had left the area for work in larger cities, and public integrated schools were available to residents, the Enterprise Academy suffered declining enrollment. It operated until 1886.