The cemetery was established in 1660. In November of 1668, Jamaica townsman John Wascot was hired to enclose the "burring pias", then ten rods square, with a fence, five rails high. Several references were made to the "burring place" during the 17th century when citing other locations in Jamaica.
The cemetery was associated with The Old Stone Church, finished in 1699.
The early graveyard was entered from an extension of Beaver Road, on the north side of today's Prospect Cemetery. Gradually, in the first half of the 19th century, its size was increased as various individuals purchased the land surrounding the cemetery and laid out family plots.
The cemetery, consisting of a number of different sections added over a 200-year period, was taken over by a single group in 1879, when the Prospect Cemetery Association of Jamaica Village, Inc., was formed. This is the first record of the name “Prospect” for the cemetery. Before the Prospect Cemetery Association acquired the property, the cemetery was still owned by the Town of Jamaica. Eventually, the Association, which still exists today, received title to all of the cemetery grounds.