Paxton was first settled in 1749 and was officially incorporated in 1765.
The district of Paxton was originally taken from the towns of Leicester and Rutland, in nearly equal parts, and was incorporated February 12, 1765. Charles Paxton, marshal of the Admiralty Court, offered a church bell to the town if it was named after him; no such gift was ever made. The inhabitants soon commenced their plan for building a meeting house, and on the first day of April 1765, the town voted to build it. It was raised on 18 June 1766, and this is the frame of the present meeting house.
In 1766, within two years of the incorporation of the town, the foundation of the present meeting house was laid, on what is now the common, near the flagstaff. The land was given by Seth Howe, from a piece of his pasture.
David Davis went to Boston with a pair of oxen and drew to Paxton the bell now in use, which was made by Paul Revere.
A small historic and now defunct amusement park called "Paxton Yard" operated here in the mid 20th century.