Oella was founded in 1808 by the Union Manufacturing Company as a working class community for the company's mill workers. It was one of the earliest and most extensive cotton factories in the United States and used water-powered looms as early as 1819.
The Union Manufacturing Company was motivated by the Embargo Act of 1807 which required Baltimore merchants to manufacture finished goods in the colonies rather than England. Stock in the company was issued to fund a series of industrial mills, the largest working with cotton and wool. Child and indigent labor was used reaching 150 employees in 1811. After the War of 1812 ended the embargo, cotton prices fell. A fire at the largest mill on 13 December 1815 took a decade to rebuild and recover from. The Mill rebounded with water driven looms, and expanded to three mill buildings before finally dissolving in 1887 after another drop in textile prices. William J. Dickey of Dickeysville (Gwynns Falls) purchased the mill in 1887, operating it as W.J. Dickey and Sons, naming the mill "Oella" after the first woman to sip cotton in America.
The Oella Historic District includes the village that consists of 19th century workers housing and one late 19th century church. The only known 20th century building is the W.J. Dickey Company Mill constructed in 1919 as a rebuild after a 1918 fire. The plant was eventually used for the city. A drawing from 1812 by Maximilian Godefroy shows most of the stone buildings. The brick houses date from the mid-19th century, while the frame buildings were constructed at the end of the century. The Oella Methodist Church is a simple frame building with a tower on the northeast corner, which has been converted into offices. The Patapsco River continued to provide power to generate electricity until 1972 when hurricane Agnes flooded the power plant. The same year the Dickey Company ceased manufacturing.
Oella is along the route of the Trolley Line Number 9 Trail