The village was incorporated in 1816. Located on NY Route 20, Madison was a busy thoroughfare for East-West travelers, and featured a hotel and resort on Madison Lake. Much of Madison was owned by business G.W. Hinman. Many visitors came from the nearby hamlet of Solsville, where the Chenengo Canal and the railroad both had stations. Madison is most famous for the Madison-Bouckville Antique Show, which takes place in August annually and sees over 1,000 antique dealers and tens of thousands of buyers traveling to Madison to find rare and unique items.
In 2000, Solsville, a half-mile north of Madison became part of the town of Madison. Solsville is known for its historic Solsville Hotel, which was at one point the town post office, saloon, and ballroom, and is currently home to a restaurant and Irish popular pub, owned by B. Dixon. The old canal house in Solsville has also been converted into a bar.