By some accounts, the town is named after the capital of Portugal. However, the 1810 US Census for the town shows the town's name as Lisburn, which is a city located in Northern Ireland adjacent to the capital of Belfast. Belfast was the birthplace of Alexander Macomb, the prosperous New York City merchant of Loyalist sympathies. Earlier in 1791, he purchased much of Northern New York along the St. Lawrence River and Lake Ontario, which the state had released for public sale after cession of the land by the Iroquois. With partners, Macomb sold the land for development.
The Town of Lisbon is in the northern part of the county and is northwest of Canton.
The first European-American settler arrived around 1799. Many migrants arrived in the area from New England and were eager to buy land. Macomb and his partners believed that upstate New York was strategic for prosperous development, as they were depending on the growing trade with Canada across the St. Lawrence River and Lake Ontario. Two factors worked against this: the War of 1812, preceded by a US embargo against trade with Canada, which damaged the upstate economy; and the construction of the Erie Canal in 1824, which enabled transportation between areas accessible to the Great Lakes and New York City. Development and population flowed west.
The Town of Lisbon was the first town in the county; it was formed in 1801, before the county was established.