Jasper Tudor, the Lord of Abergavenny and uncle of King Henry VII, on 10 October 1490, made a grant of land to one John ap David, and in the conveyance fixes one boundary as "...the highway leading from the church of Trevethin towards the bridge called Pont poell." It would seem therefore that the town gains its name from the bridge placed near the swampy pool which almost certainly would be greater than the forge pond that exists today.
The coming of industry
Pontypool grew principally from the manufacture of iron. Although iron was made from 1425 in Pontymoile, now a suburb of Pontypool, Pontypool grew only when Richard Hanbury bought land locally during the Elizabethan period in 1588 and constructed an ironworks. The Hanburys pioneered the production of iron Pontypool japan-ware with its decorated, lacquered style.
The Hanbury family lived in what was to become Pontypool Park, and around this the town grew. Much of the town's history comes from this family of industrial pioneers. The Napoleonic Wars were kind to the Hanburys, with increased prosperity due to the demand for munitions and armaments. With this increased wealth, Capel Hanbury Leigh extended Pontypool Park House between 1779 and 1840. Highly elaborate wrought iron gates can be seen at the entrance to the park. These were made in the 1720s and remodelled in 1835 by Thomas Deakin. They were a gift to Major John Hanbury (1664–1734) by the Duchess of Marlborough.
Between 1996 and 1998 a new bypass completely diverted traffic away from the town centre. This added to the decline of many years and much of the old town centre was increasingly abandoned by both visitors and businesses. In 2003 plans were drawn up to regenerate the town centre and today the town has experienced a redevelopment of Crane Street, one of the principal shopping streets.
Crane Street had been the location of the town's central railway station, on the Newport - Blaenavon branch line but it was closed to passengers in April 1962 and freight in 1967. Contrary to what is often remembered locally, the passenger service to Crane Street had already been closed for more than a year before the publication of the notorious Beeching Report. In financial terms the line was doing no worse than any of the other lines in the South Wales valleys but the closure of the railway line was linked to the opening of the new Llanwern steelworks on the outskirts of Newport. The amount of freight traffic the new plant generated was causing severe rail congestion in the Newport area and in an era when passenger rail transport was in decline a number of local services in Monmouthshire were withdrawn by the British Transport Commission as an operational measure.
Pontypool still has a passenger rail link, but as the main Cardiff - Crewe line skirts the town it is well over a mile from the town centre. Pontypool Road as it was originally known, became a major and important junction, engine shed and marshalling yard, but the decline of the railways after the war, combined with the run-down of the mining industry, hit the area badly and all the local passenger and coal lines have been closed and the tracks removed. Passenger services to Usk and Monmouth ended in 1955, and the line to Neath and Swansea (which also stopped at a station called Pontypool Clarence Street on the edge of the town centre) closed in 1964 - the latter being the only rail service in the area which actually did fall victim to Dr Beeching. In 1972 the station was renamed to just "Pontypool" and again in 1994 to "Pontypool and New Inn", to reflect its actually location in the suburb to the south-east of the town, but it is now an unmanned station with few amenities, and only approximately half of the passenger trains on the line stop there, the rest going straight through.
As of 2008 Ferraris Bakery's Pontypool Branch shut down due to liquidation. About 55 jobs were lost altogether.
The once famous Clarence Hotel was redeveloped in 2004-05  and converted into flats and offices . In April 2006 a new Wetherspoons pub was opened on Osborne Road and named in honour of John Capel Hanbury, former owner of Pontypool Park House (now St. Alban's R.C. High School). In March 2011 the local council reported the winning of bids to various bodies including the lottery heritage fund for further works of regeneration in the town centre. The Pontypool regeneration fund is worth approximately £13m and will fund restoration works to key buildings, including the market hall, and will allow property owners access to 80% grants for works.