The earliest documentary reference to Brunna, meaning stream, is from a document of 960, and the town appeared in the Domesday Book as Brune.
Bourne Abbey, (charter 1138), formerly held and maintained land in Bourne and other parishes. In later times this was known as the manor of 'Bourne Abbots'. Whether the canons knew that name is less clear. The estate was given by the Abbey's founder, Baldwin fitz Gilbert de Clare, son of Gilbert fitz Richard, and later benefactors. The abbey was established under the Arrouaisian order. Its fundamental rule was that of Augustine and as time went on, it came to be regarded as Augustinian. The Ormulum, an important Middle English Biblical gloss, was probably written in the abbey in around 1175.
Bourne Castle was built on land that is now the Wellhead Gardens in South Street.
The then local authority, Bourne Urban District Council, was very active in the interests of the town, taking over the gas works and the local watercress beds at times of financial difficulty and running them as commercial activities. Large numbers of good quality council houses were built by them in the early 20th century.
Bourne sent many men to both of the 20th century's world wars, as did any other town in Britain, but was otherwise only lightly affected. During World War II a German bomber crashed onto the Butcher's Arms public house in Eastgate, after being shot down. Nine people were killed, including the bomber's crew. In a separate incident a number of bombs were dropped on the Hereward Camp approved school, a row of wooden huts adjacent to the woods that may have been mistaken for a military camp. Charles Richard Sharpe was injured in the second incident, but he was no stranger to fighting the Germans, having been awarded the Victoria Cross in the first conflict of the century.
Later Bourne had a railway station which was on both the Great Northern line from Essendine to Sleaford and the Midland and Great Northern Joint Railway connecting the Midlands to East Anglia. Both these were closed to timetabled passenger service by the end of February 1959 and the lines were closed to occasional use by the Beeching Axe. With the exception of the Red Hall, the principal station buildings were demolished in 1964, the year after the Beeching Report. The main goods shed survived however, just into the new century and there remains an unusual survival: a goods store of wooden construction. The mechanism of the locomotive turntable is now in the Wansford depot of the Nene Valley Railway.
The Bourne-Morton Canal or Bourne Old Ea connected the town to the sea in Roman times.
Until the mid-19th century, the present Bourne Eau was capable of carrying commercial boat traffic from the Wash coast and Spalding. This resulted from the investment following the Bourne Navigation Act of 1780. Passage became impossible once the junction of the Eau and the River Glen was converted from gates to a sluice in 1860.