Shutesbury was first settled in 1735, when it was called Road Town, because its only purpose was that of a road between towns. Road Town was officially incorporated as Shutesbury in 1761. The town was renamed in honor of Samuel Shute, former governor. Logging has been an important economic activity in the town for the past 200 years.
Since the expansion of the University of Massachusetts Amherst, Shutesbury has grown in size steadily from the 1970s. New strict zoning laws have changed building regulations to stay rural.
The December 2008 New England ice storm (December 11–12, 2008) inflicted heavy damage on the forests in the town, coating trees with a ½-inch to 1-inch thick layer of ice. Tree limbs came crashing down on power lines, houses, and cars. Power was out in Shutesbury for up to ten days, and the state of Massachusetts declared a state of emergency. The estimated cost of cleaning up ranged from $50,000 to $100,000. The National Guard was called in to help with cleanup, and the worst-hit part of town, Wendell Road and Pelham Hill Road, was decimated by fallen trees.
As of 2015, Shutesbury still has limited access to high-speed internet; about 1/2 the town has access to 3Mbps DSL, the rest rely on universal-placement satellite uplinks or dial-up access. The Boston Globe ran a story in 2005 describing Shutesbury and its neighboring town, Leverett, as one of "America's Broadband Black Holes". Basic cellphone coverage remains spotty/or non-existent throughout the entire town.
A 2012 attempt to pass a ballot measure to fund building a new library for the town resulted in an electoral tie, defeated on appeal. $233,232.93 in personal pledges and grants were raised kickstart the effort. The current library, the first to ever be built in Shutesbury, was erected in 1902, is very small - 768 square feet - and cannot provide modern amenities such as running water.