The Senecas had a major village here called "Kah-ni-sti-oh." The first settlers arrived around 1788, making Canisteo one of the earliest locations occupied in the county.
Canisteo is rich in Indian lore. Site of the World Famous Living Sign, noted by both Ripleys Believe it or Not, and the Registry of Historical Places.
The town was formed in 1796 at the time of the creation of the county and is one of its original towns. From parts of Canisteo came, in whole or part, the Towns of West Union, Hartsville, Hornellsville (1920), Greenwood (1827), Troupsburg (1808, 1820) and Jasper (1927).
The population of Canisteo in 1905 was 3,171.