The town was first granted in 1735 by Colonial Governor Jonathan Belcher as "Number Seven," one in a line of nine towns set up as defense barriers against Indian attacks. The towns were renamed following the 1741 establishment of New Hampshire as a separate province. Settled in 1741, the town was granted in 1748 by Governor Benning Wentworth as "Hillsborough," named for Sir Wills Hill, Earl of Hillsborough. It would be incorporated in 1772 by Governor John Wentworth.

Hillsborough is the birthplace in 1804 of Franklin Pierce, 14th president of the United States, and the only president from New Hampshire. The Pierce Homestead was built in 1804 by his father, Benjamin Pierce, a general in the Revolutionary War, and twice governor of New Hampshire. Restored in 1925, the home was designated a National Historic Landmark in 1961. Listed on the National Register of Historic Places, the house is today a museum owned by the state, and operated by the Hillsborough Historical Society.